The numbers: The number of Americans who applied for unemployment benefits in mid-January matched a four-month low of 190,000, suggesting the U.S. labor market is still plenty strong despite rising layoffs in some parts of the economy.
New applications fell from 205,000 in the prior week, the government said Thursday. The last time claims were that low was in late September.
Economists polled by the Wall Street Journal had forecast new claims would total 215,000 in the seven days ending Jan 14. The figures are seasonally adjusted.
The number of people applying for jobless benefits is one of the best barometers of whether the economy is getting better or worse. New unemployment filings are still historically low, but not quite as low as they were last spring.
Key details: Forty of the 53 states and U.S. territories that report jobless claims showed a decline last week. New York posted the biggest drop, reversing a surge in the prior week.
One caution on jobless claims: They are prone to large swings during the holiday season that runs from Thanksgiving through Martin Luther King Jr. Day in January.
Since Thanksgiving they’ve ranged from a high of 241,000 to a low of 190,000.
The number of people already collecting unemployment benefits, meanwhile, rose by 17,000 to 1.65 million in the week ended Jan. 7.
These so-called continuing claims are still low, but a gradual increase since last spring suggests that it’s taking longer for people who lose their jobs to find a new one.
Big picture: Jobless claims are one of the first indicators to deteriorate when the economy is headed toward a recession, but right now they signal a strong labor market and stable U.S. growth.
Yet the economy could slow and more businesses could start laying off workers, analysts warn, as the Federal Reserve raises interest rates to squash high inflation.
Looking ahead: “Continuing claims have increased somewhat in recent weeks, but still remain near their lowest level in more than 50 years,” said senior economist advisor Stuart Hoffman of PNC Financial Services.
“There have been a growing number of layoff announcements, especially by tech companies, in the past month which should push initial claims higher later this winter.”