In more than 14 years, initial claims for unemployment benefits dropped to the lowest weekly level. This data indicates that fewer employees are being laid off, an obvious positive sign for the labor market.
For the weekend-ending October 11, the number of people who applied for unemployment benefits in the US plunged to 264,000, down 23,000. This level is the lowest reported since April 2000, according to the US Labor Department. Polled economists expected early claims for standard state unemployment insurance benefits to climb to 289,000 from the prior week’s numbers of 287,000.
The government also confirmed the four-week average for new jobless claims was down by 4,250 to 283,500, which also reached the lowest level since 2000. However, as stock futures pointed to sharp declines, the new data did little to calm people down in the market.
Today’s report provides additional evidence of improvement for employment trends and specific to job openings, revealed that trends hit a 13-year high recently, which means greater opportunities for workers.
Stephen Stanley, chief economist of Amherst Pierpont Securities pointed out that full employment has not yet been achieved but that it is getting closer, adding that it is just a matter of waiting for the “wage shoe” to drop.
The current labor market is not fully healed. There are still millions of people in the US unemployed or under-employed. In addition, many laid off workers are having a difficult time securing new employment. From the fastest pace in over six years, there was a recent pull-back in hiring, which coordinates with data that suggests jobs are not being filled quickly.
The government also reported that continuing claims climbed by 7,000 to 2.39 million in week-ending October 4, claims that represent people already receiving benefits and reported with a one-week delay. For continuing claims, the four-week average dropped to the lowest since June 2006, hitting 2.4 million, down 10,750.
As noted by RDQ Economics, there is no evidence that labor market conditions are softening. They also said that data on unemployment claims shows a continuing improvement in the labor market, one that is moving faster than the Federal government expected.