Unemployment benefit claims dipped slightly last week as lay-offs remain low

The number of people applying for US unemployment benefits fell slightly last week as lay-offs remain low and most American workers enjoy job security.

The Labor Department said on Thursday that initial jobless claims ticked down to 197,000 from a revised 199,000 the week before. The four-week average of claims, which smooths out week-to-week volatility, dropped by 2,500 to 198,000.

Claims for jobless benefits are a proxy for lay-offs, and economists watch them because they can be a sign of where the job market is headed. So far this year, claims have remained at a historically low level below 220,000.

The report suggests that most companies are confident enough in the economy and their sales to hold onto their workers. At the same time, hiring has been sluggish, resulting in a ‘low-hire, low-fire’ job market. Last month, the unemployment rate ticked up to a still-low 4.2 per cent.

The number of people seeking unemployment benefits has fallen below 200,000 for four straight weeks now, “an incredibly low level of lay-offs for a sustained period of time that hasn’t been seen since the 1960s”, said Heather Long, chief economist at the Navy Federal Credit Union.

At the same time, those out of work are having a more difficult time finding a new job. The number of people unemployed for more than six months is at a five-year high, Long noted.

The government said last week that businesses and other employers added just 29,000 jobs in September, down from 133,000 in August and below what economists had forecast.

Yet, with population growth slowing and immigration into the United States dropping, the economy doesn’t need to generate as many jobs every month to keep the unemployment rate low.

AP