U.S. Initial Jobless Claims Fall to 197,000 as Layoffs Remain Historically Low

New applications for U.S. unemployment benefits fell to 197,000 in the week ended October 3, a drop of 2,000 from the previous week’s revised figure, the Labor Department reported Thursday. The level remained historically low, suggesting that employers are still avoiding large-scale job cuts even as hiring has slowed.

Initial claims have now been below 200,000 for four consecutive weeks. Yet the latest figures also show a small increase in the number of people continuing to receive benefits, a reminder that fewer new layoffs do not necessarily mean finding another job has become easier.

New claims remain below 200,000 for a fourth week

The Labor Department’s October 8 weekly claims release put seasonally adjusted first-time filings at 197,000, compared with a revised 199,000 a week earlier. The previous week’s estimate had initially been reported at 197,000 before being raised by 2,000, making the revision important to the latest week-over-week comparison.

A less volatile measure told a similar story. The four-week moving average of new claims declined by 2,500 to 198,000, from a revised 200,500. Weekly claims were 198,000 for both September 12 and September 19, then 199,000 for September 26, before slipping to 197,000 in the latest report. That run of sub-200,000 readings indicates that the low level was not confined to a single unusual week.

For additional perspective, the comparable week a year earlier recorded 233,000 seasonally adjusted initial claims, and the four-week average was 227,500. Today’s readings are considerably lower on both measures. The comparison is useful, although the number of people filing for benefits can be affected by eligibility rules, seasonal patterns and other factors beyond the total number of jobs eliminated.

The difference between adjusted and unadjusted claims is also worth separating. Actual filings before seasonal adjustment rose by 11,994 to 170,333 in the week ended October 3. The Labor Department’s seasonal factors had anticipated a larger increase of 13,725. Once that expected seasonal movement was taken into account, the national adjusted figure registered a decline rather than an increase.

Unemployment insurance filings provide a timely view of people newly seeking benefits, not a complete census of layoffs. Some displaced workers do not qualify for benefits or do not apply, and the initial figures may be revised when more state reports arrive. Even with those limitations, repeated low readings offer evidence that the flow of new claims remains contained.

Continuing claims edge up, with the longer trend still lower

The picture was slightly different for people already receiving unemployment benefits. Seasonally adjusted continuing claims increased by 17,000 to 1.716 million in the week ended September 26, from a downwardly revised 1.699 million. That measure is reported with a one-week lag relative to initial claims, so it does not describe precisely the same reporting period.

The insured unemployment rate stayed at 1.1%. Meanwhile, the four-week average of continuing claims fell by 12,250 to 1.711 million. In the comparable period a year earlier, seasonally adjusted insured unemployment had stood at 1.929 million. The rise in the latest weekly reading therefore sits alongside a lower recent average and a substantial year-over-year decline.

Initial and continuing claims capture different stages of unemployment. The first tracks newly filed applications, while the second offers a view of people still claiming benefits after an initial filing. If employers lay off few additional workers but hiring opportunities are scarce, someone who has already lost a job may take longer to find a replacement. One weekly increase in continuing claims does not establish that this is becoming a sustained trend, but it helps explain why the two readings need not move together.

Neither series covers everyone looking for work. People who have exhausted eligibility, never qualified for benefits or are entering the labor force without a recent insured job can be missing from unemployment insurance counts. Monthly labor-market surveys are needed to evaluate those broader groups.

September hiring figures show the other side of the labor market

That wider view remains subdued. The Bureau of Labor Statistics said in its September employment report that nonfarm payrolls increased by just 29,000. The unemployment rate was 4.2%, compared with 4.1% in August, and the number of unemployed people was about 7.1 million. BLS characterized both payroll employment and the unemployment rate as little changed.

Revisions to earlier payroll figures reinforced the slow-growth picture. August’s gain was lowered to 133,000 from 162,000, while July was revised from a 21,000 increase to a loss of 10,000 jobs. Together, those changes removed 60,000 jobs from the two-month total previously reported. BLS said the average monthly payroll gain over the preceding 12 months was 45,000.

Employer-reported turnover statistics provide a separate check on the layoffs question. In August, the latest month available from the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey, layoffs and discharges were little changed at about 1.6 million, representing a rate of 1.0%. Hires were also little changed at 5.2 million, with a hiring rate of 3.3%, while available job openings stood at 7.1 million. These monthly numbers cover employer activity and are not directly comparable with the weekly count of benefit applications.

Low layoffs can protect workers who already have jobs without producing an equally favorable market for those trying to enter or reenter employment. September’s household survey counted about 1.9 million people who had been unemployed for 27 weeks or longer, or 27.1% of all unemployed people. That group is not necessarily captured by current initial-claims figures, making it a useful counterpoint to the low weekly filings.

The October claims release therefore offers a narrow but important message: new unemployment-benefit applications remain scarce by recent and historical standards. Stronger evidence of a broad improvement in employment prospects would require more hiring as well as limited job losses. The Labor Department’s next weekly claims update is due October 15, while the BLS has scheduled the October employment report for November 6.