The number of first-time claims for unemployment benefits dropped considerably last week, underscoring how employers are holding on tightly to workers as the labor market remains full of opportunities for job hunters.
Initial claims for unemployment insurance were 193,000 for the week ended September 24, down 16,000 from a downwardly revised total of 209,000 claims from the prior week, according to Labor Department data released Thursday.
Economists had forecast 215,000 weekly applications would be filed, according to estimates on Refinitiv.
The last time weekly claims fell below 200,000 was in early May.
The Labor Department said the number of continuing jobless claims for the week ended September 17 dropped by 29,000 to just under 1.35 million, the lowest level since the beginning of July.
The job market has remained robust this year despite recession fears and the Federal Reserve’s aggressive efforts to knock down high inflation. After the pandemic hurled the economy and labor market into upheaval, employers — especially those in service industries — have struggled to regain their pre-pandemic employment levels.
In July, there were two job openings for every person looking for a job, according to monthly data from the Bureau of Labor Statistics.
The central bank wants more slack in the labor market, since tight employment pushes up wages and keeps inflation elevated. But as the unemployment rate rises, workers lose that bargaining power for higher wages, and households pull back on spending.
When the Fed announced its latest rate hike last week, it also released projections that unemployment could grow to 4.4% next year. Assuming no change in the labor force, that would mean 1.2 million more people would be unemployed.
Weekly jobless claims data is subject to revisions.