WASHINGTON, Oct 8 (Reuters) – The number of Americans filing new claims for unemployment benefits fell last week, pointing to continued labor market stability despite job growth slowing sharply in September.
Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 197,000 for the week ended October 3, the Labor Department said on Thursday. Economists polled by Reuters had forecast 200,000 claims for the latest week.
Claims have held near 57-year lows for four straight weeks, consistent with what economists said remained a “low-hire, low-fire” labor market. Nonfarm payrolls increased by a paltry 29,000 jobs in September, the government reported last week.
Economists say tepid hiring and a shrinking labor pool amid retirements and an immigration crackdown are holding back job growth, leaving historically low layoffs to support the labor market.
Though employers are hoarding workers against the backdrop of strong profit growth and stock market performance, they have remained hesitant to add to headcount. Economists have blamed that trend on uncertainty, first from tariffs and then the US-Israeli war with Iran, which has pushed up diesel prices to record highs and boosted prices for other commodities.
Minutes of the Federal Reserve’s September 15-16 policy meeting, published on Wednesday, showed officials “judged that labor market conditions were stable and generally viewed the labor market as close to maximum employment.” The minutes also noted that policymakers “generally viewed the upside and downside risks to the labor market as broadly balanced.”
The US central bank last month raised its overnight benchmark interest rate by 25 basis points to the 3.75%-4.00% range, the first hike in three years, and flagged further increases in borrowing costs in the months ahead.
The odds of another rate hike this month were diminished by the underwhelming payroll gains in September as well as cooler-than-expected inflation readings for July and August. Economists expect the Fed to raise rates in December.
The claims report showed the number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased 17,000 to a seasonally adjusted 1.716 million during the week ended September 26.
Despite the still-low level of the so-called continued claims, the slow pace of hiring has left some unemployed people experiencing long bouts of joblessness.
The median duration of unemployment was 11.5 weeks in September, near a 4-1/2-year high.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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