THE number of Americans filing new applications for unemployment benefits fell to an 11-month low last week, pointing to a stable labour market, though a slowdown in hiring has led some laid-off workers to experience long bouts of joblessness.
Signs of a steadily cooling labour market could allow the Federal Reserve to keep interest rates unchanged in January against the backdrop of still high inflation.
The US central bank last month projected a shallower path of rate cuts this year than had been forecast in September, when it launched its policy easing cycle.
Fed Governor Christopher Waller said yesterday that he expected further rate cuts, adding that the pace of the reductions “will depend on how much progress we make on inflation, while keeping the labour market from weakening.”
“The Fed says rate cuts from here on out will be gradual,” said Carl Weinberg, chief economist at High Frequency Economics.
Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 201,000 for the week ended Jan. 4, the lowest level since February 2024, the Labor Department said yesterday. Economists polled by Reuters had forecast 218,000 claims for the latest week.
The report was published a day early as federal government offices are closed today in honour of former President Jimmy Carter who died on December 29 at the age of 100.
Though claims tend to be volatile at the turn of the year, they have bounced around levels associated with low layoffs that are underpinning the labour market and broader economy. The four-week average of claims, which strips out seasonal fluctuations from the data, dropped 10,250 to 213,000 last week.
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