The number of Americans filing for unemployment benefits rose slightly last week but remained near a four-month low, a sign the labor market remains healthy despite an increasingly dark economic outlook.
Figures released Thursday by the Labor Department show that applications for the week ended Sept. 17 rose to 213,000 from the downwardly revised 208,000 recorded a week earlier. That is still below the 2019 pre-pandemic average of 218,000 claims.
Continuing claims, or the number of Americans who are consecutively receiving unemployment aid, fell to 1.37 million, down by 22,000 from the previous week's revised level. One year ago, nearly 11.25 million Americans were collecting unemployment benefits.
The four-week moving average – which smooths out volatility – dropped to 216,750.
A man hands his résumé to an employer at the 25th annual Central Florida Employment Council Job Fair at the Central Florida Fairgrounds. (Paul Hennessy/SOPA Images/LightRocket via Getty Images / Getty Images)
For months, the labor market has remained one of the few bright spots in the economy, with the August jobs report showing that employers onboarded 315,000 new workers last month.
But hiring is expected to weaken in the coming month as the Federal Reserve raises interest rates at the fastest pace in three decades in order to tame scorching-hot inflation.
Policymakers approved a third straight 75-basis-point interest rate hike on Wednesday and signaled that another increase of that magnitude is on the table in November.
Fed Chairman Jerome Powell told reporters during the post-meeting press conference in Washington that there is no "painless way" to wrangle inflation under control.
Jerome Powell, chairman of the U.S. Federal Reserve, arrives to speak during a news conference following a Federal Open Market Committee meeting in Washington, D.C., on Wednesday. (Sarah Silbiger/Bloomberg via Getty Images / Getty Images)
Updated forecasts show that officials see unemployment climbing to 4.4% by the end of next year, up from the current rate of 3.7%. That's significantly higher than June, when policymakers saw the jobless rate inching up to 3.7%. Estimates for economic growth, meanwhile, were marked down to 1.2% in 2023 and 1.7% in 2024.
"The chances of a soft landing are likely to diminish to the extent that policy needs to be more restrictive, or restrictive for longer," Powell said. "Nonetheless, we’re committed to getting inflation back down to 2%. We think a failure to restore price stability would mean far greater pain."