U.S. weekly jobless claims total 198,000, fewer than expected

Jobseekers during a Construction Career Fair at Cape Fear Community College in Wilmington, North Carolina, US, Wednesday, March 15, 2023. 

Allison Joyce | Bloomberg | Getty Images

Initial filings for unemployment benefits dipped last week, indicating that the U.S. labor market remains tight and a potential factor in persistent inflation.

Weekly jobless claims totaled a seasonally adjusted 198,000 for the period ended Oct. 14, the Labor Department reported Thursday. That marked a decline of 13,000 from the previous week and was below the Dow Jones estimate for 210,000. It was the lowest weekly level since Jan. 21.

Claims have been in a general deceleration pattern since the summer, but some economists worry that could change. Announced layoffs have been on the rise in recent weeks, indicating that the tide of lower claims could turn soon.

Continuing claims, which run a week behind, totaled 1.734 million, up 29,000 from the previous week and higher than the FactSet estimate for 1.698 million.

The labor market has been a critical factor in the Federal Reserve’s deliberations over monetary policy. Officials worry that a still-tight labor market could provide upward pressure on prices even after the central bank has raised rates 11 times totaling 5.25 percentage points since March 2022.

Markets were awaiting a speech later in the day from Fed Chair Jerome Powell, who is expected to provide some guidance on where policymakers head from here.

Following the report, stock market futures were mixed while Treasury yields held higher.

The labor market thus far has shown few effects of the United Auto Workers strike as well as other labor unrest. Claims spiked briefly over the summer but have been in a generally declining pattern since early August, holding in a range below 230,000 in recent weeks.

This week’s report covers the survey week the Labor Department uses for its nonfarm payrolls report.

In other economic news Thursday, the Philadelphia Fed reported its manufacturing index rose 5 points in October but remained in contraction territory at -9, lower than the -6.8 forecast. The survey gauges companies reporting expansion against contraction, so any reading below zero indicates contraction.

New orders, shipments and employment all turned positive after being in negative territory for September.

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