The number of people continuing to claim unemployment benefits in the United States last week hit the largest drop since July, and the number of initial claims was lower than expected | Anue Juheng – US Stock Radar

The latest data released by the U.S. Department of Labor on Thursday (7th) showed that the number of people continuing to receive unemployment benefits last week was far lower than expected, marking the largest drop since July. In addition, the number of initial claims for unemployment benefits was also lower than market expectations. Some analysts pointed out that due to holidays, the number of initial unemployment benefits fluctuates greatly at this time of year, making it difficult to obtain accurate market signals.

In the week ending December 2, the adjusted number of people claiming unemployment benefits in the United States was 220,000, lower than market expectations of 222,000, but higher than the revised previous value of 219,000, and the four-week moving average was 220,750. people.

As of the week of November 25, the adjusted number of people continuing to receive unemployment benefits in the United States was 1.861 million, a significant decrease of 64,000 from the revised previous value of 1.925 million, far lower than market expectations of 1.91 million, and the four-week moving average reported 1.87225 million.

Nonetheless, the job market is slowing, and the JOLTS job vacancy report recently released by the U.S. Department of Labor shows that there were 1.34 job vacancies per unemployed person in October, the lowest level since August 2021. While job creation remains largely healthy, employers are increasingly halting hiring, unemployment is rising and wage growth is losing steam.

On the other hand, consulting firm Challenger, Gray & Christmas released data on the same day showing that U.S. employers laid off 45,510 workers in November, which was lower than the same period last year but an increase of 24% from October. This is another sign of a cooling labor market.

Andrew Challenger, the company’s senior vice president, said in a statement that the job market is cooling and employers are not hiring as quickly. The labor market appears to be stabilizing, with more normal fluctuations, but layoffs are expected to continue next year.

Analysts pointed out that the loosening of labor market conditions, coupled with falling inflation, led financial markets to conclude that the Federal Reserve (Fede) may have ended its current interest rate hike cycle. According to CME Group’s FedWatch Tool, financial markets predict that the Fed will cut interest rates as soon as the first quarter of next year.

The Fed is expected to keep interest rates unchanged next Wednesday (13th). Since March 2022, the Fed has raised its policy rate by 525 basis points to the current range of 5.25%-5.50%.

Expert opinion

Goldman Sachs economists estimate that seasonal distortions account for at least 269,000 of the increase in unemployment claims since early September, and predict that this number will increase by another 125,000 by March next year.

Lou Crandall, chief economist at Wrightson ICAP in New York, believes the job market is a little more soft than recent jobless claims might suggest, but the 15% surge in continuing claims since Labor Day is vastly overstated. The worsening situation; seasonal adjustment distortions, will be smoothed out in future revisions.