New applications for U.S. unemployment benefits came in below market expectations, pointing to a labor market that remains steady. With the Federal Reserve widely expected to leave its benchmark rate unchanged at a Federal Open Market Committee meeting later this month, attention is turning to how the latest employment data will shape future rate decisions.
The U.S. Labor Department said on the 22nd that initial jobless claims totaled 194,000 for the week of Oct. 11-17, according to Reuters and other outlets. That came in below the 200,000 expected by analysts surveyed by Bloomberg, and was down 6,000 from a week earlier. The prior week's figure was revised up to 200,000 from 199,000. The four-week moving average, which smooths weekly volatility, fell 1,000 from the previous week to 197,750.
Continuing claims, filed by those receiving benefits for two weeks or more, rose 25,000 from the prior week to 1.728 million for the week of Oct. 4-10.
Initial claims are seen as a gauge of corporate layoffs, and in recent weeks they have hovered near their lowest levels since the 1960s. Despite rising cost pressures from a surge in energy prices, there are no signs that large-scale layoffs are spreading. U.S. companies appear to be sticking with a pattern of low hiring and low firing, staying cautious about new recruitment while retaining existing staff as much as possible.
The Fed will hold its FOMC meeting on the 27th and 28th to decide the benchmark rate. Last month, the central bank raised the rate by 25 basis points to a range of 3.75% to 4.00%. While inflation pressure persists as energy prices climb amid the war in Iran, the prevailing view in the market is that the Fed will hold rates this month and monitor upcoming price and employment data.