The number of Americans filing new applications for unemployment benefits dropped to an 11-month low last week.
The mentioned data indicate that the current situation in the United States labor market is stable. However, it is worth noting that the slowdown in hiring has caused some laid-off workers to experience prolonged bouts of joblessness.
Signs of a steady cooling of the labor market may allow the central bank of the United States to keep interest rates unchanged in January amid inflation, which still continues to be high, despite significant progress in combating price increases in recent years.
It is worth mentioning that last month the Federal Reserve released a forecast envisaging a shallower path of interest rate cuts in 2025. It is worth noting that in September, the US financial regulator projected more intensive actions as part of monetary policy easing.
Fed Governor Christopher Waller said this week that further lowering of borrowing costs will depend on how much progress is made in combating inflation while keeping the labor market from weakening.
Carl Weinberg, chief economist at High Frequency Economics, said the claims data released on Wednesday suggests that the United States central bank does not need to rush to ease monetary conditions.
Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 201,000 for the week ending January 4. The relevant information was published by the United States Labor Department. It is worth noting that the mentioned indicator is the lowest since February 2024. Economists polled by the media projected this figure would be fixed at 218,000.
Nancy Vanden Houten, lead US economist at Oxford Economics, said that the low level of claims is consistent with the labor market, which continues to be characterized by a low pace of layoffs. It was also separately noted that the initial claims data will be subject to a seasonal noise for at least a few more weeks.
US policymakers currently do not see signs of a rapid deterioration in the labor market.
As we have reported earlier, US Unemployment Rate Demonstrates Resilience.
