Ahmed Kamel – Egypt Daily News
Applications for U.S. unemployment benefits fell to their lowest level in more than three years last week, signaling continued strength in the labor market and adding complexity to the Federal Reserve’s upcoming interest rate decision.
The Labor Department reported Thursday that initial claims for the week ending November 29 totaled 191,000, down from 218,000 the previous week. This marks the lowest level since September 24, 2022, when claims stood at 189,000. Analysts had expected 221,000 claims, according to a FactSet survey.
Jobless claims are widely used as a proxy for layoffs and provide near real-time insight into the health of the labor market. Recent announcements of job cuts by major employers, including UPS, General Motors, Amazon, and Verizon, may not yet be fully reflected in the data, as layoffs often unfold over weeks or months.
Despite these layoffs, the U.S. job market remains in a “low-hire, low-fire” state. While the unemployment rate remains historically low, workers who lose their jobs often face challenges securing new employment quickly.
Private payroll data from ADP indicated that 32,000 jobs were lost in November, a relatively modest figure that contrasts with expectations and may influence market sentiment. The subdued payroll report has increased speculation that the Federal Reserve may cut its benchmark interest rate next week to support the labor market.
The Fed’s decision will also weigh broader economic indicators, including inflation. Core inflation, the Fed’s preferred measure, remains above the central bank’s 2% target, and a new government report on inflation is scheduled for Friday, ahead of the rate-setting meeting.
Earlier data showed mixed trends in hiring, with September’s delayed report indicating 119,000 new jobs added and the unemployment rate rising slightly to 4.4%, its highest in four years. The increase reflected more Americans entering the labor market in search of work, though not all immediately secured jobs.
Other economic indicators paint a similarly cautious picture. Retail sales slowed in September following three months of gains, consumer confidence has fallen to its second-lowest level in five years, and wholesale inflation has eased slightly.
Thursday’s Labor Department report also showed that the four-week moving average of claims, which smooths weekly volatility, declined by 9,500 to 214,750. Meanwhile, the total number of Americans receiving jobless benefits for the prior week ending November 22 fell by 4,000 to 1.94 million.
Overall, the data suggest that while layoffs remain limited, both economic growth and inflation are slowing, heightening expectations that the Fed may reduce its key interest rate next week. If a cut occurs, it would be the third this year as the central bank attempts to balance labor market stability with broader economic challenges.
