Last week saw a moderate increase in the number of Americans applying for unemployment benefits. Initial jobless claims rose 3,000 to 213,000 during the week ended September 21 according to a report released on Thursday by the Labor Department. Figures for the prior week were revised upward by 2,000, and overall, the data is still in line with a healthy labor market.
- Initial jobless claims rose from 210,000 to 213,000 vs. 212,000 expected for the week ended September 21.
- Prior claims were revised upward by 2,000 from the original figure of 208,000.
- The four-week average dropped 750 to 212,000, indicating stability in layoffs which remain low despite the ongoing trade war.
Jobless claims, which are a key measure of layoffs, remain low despite increasingly negative reports from the manufacturing industry. At 213,000 last week and 212,000 in terms of the less-volatile four-week average, jobless claims are in check and indicate a healthy labor market. Along with robust consumer spending, the labor market has been a driving force behind the economy which has suffered from reduced business spending, a struggling housing market, and a contracting manufacturing sector.
It’s possible that layoffs remain low due to tight labor market conditions which may make it difficult for companies to rehire workers at the same cost if they were to terminate positions now. The ongoing shortage of skilled workers has left companies competing in some cases for staff. However, recent reports also indicate that demand for employment has dropped in some sectors as the market nears full employment.
Still no signs of trouble from jobless claims pic.twitter.com/DbLy3saJzb
— Joe Weisenthal (@TheStalwart) October 3, 2019
Hiring has slowed considerably – the private sector added 135,000 jobs in September vs. 157,000 in August, revised downward from 195,000. The monthly average number of jobs created in 2019 so far is 145,000, a far sight from the 214,000 monthly positions in 2018. While the tight labor market has allowed for strong consumer spending, any significant increase in layoffs could have a widespread effect in an economy already seeing recessionary indicators that threaten the longest period of economic expansion in US history.
Claims for Puerto Rico were estimated last week, according to the Labor Department. At 213,000, jobless claims are in line with expectations for 212,000 weekly claims. The number of people receiving benefits after an initial week of aid fell 15,000 to 1.65 million for the week ended September 14, the lowest level since October 2018. The monthly average of these continuing claims dropped 12,750 to 1.67 million. The rate of unemployment remains at 3.7%.
Gold has seen little reaction to the in-line jobless claims data which indicates ongoing strength in the labor market. Spot gold last traded at $1,500.81/oz, down 0.01% on the day with a high of $1,504.94/oz and a low of $1,496.60/oz. Straddling crucial support/resistance at $1,500, the precious metal is trading within a tight range – price action may yet be impacted by the release of the ISM non-manufacturing index which is due out later today at 10 am EDT.