The latest data suggest that the US labour market is still stable, even as companies remain careful about hiring new workers, according to a report from the US Labor Department. New applications for US unemployment benefits fell last week, showing that layoffs remain low despite rising costs and economic uncertainty.
US jobs report: Unemployment rate seen at 4.1%
Because the claims figures fall outside the survey period used for that report, the latest jobless claims data do not directly affect the September employment report. Layoffs announced by US-based employers fell 18% to 43,281 in September, according to a separate report from global outplacement firm Challenger, Gray & Christmas. The figure was also 20% lower than a year earlier. Announced layoffs fell 43% in the third quarter. US employers announced plans to hire 90,787 workers in September, sharply higher than the 12,325 planned hires in August. However, hiring plans were still 23% lower than a year earlier and marked the lowest September total since 2011, Challenger, Gray & Christmas said. The Federal Reserve raised its benchmark overnight interest rate by 25 basis points to a range of 3.75%-4.00% last month. Financial markets were pricing in a 37.1% chance of another rate hike at the Fed’s October 27-28 meeting, down from around 68.6% a week earlier, according to CME’s FedWatch tool. The survey’s measure of input prices rose to 77.9 from 71.1 in August. The number of people continuing to receive unemployment benefits after their first week of aid fell by 11,000 to a seasonally adjusted 1.701 million in the week ended September 19. The latest figure was the lowest since April 2023. A Conference Board survey released on Tuesday showed that the share of consumers who said jobs were plentiful fell in September to its lowest level since February 2021. Economists polled by Reuters expected US nonfarm payrolls to increase by 90,000 in September, after rising by 162,000 in August. Economists expected the US unemployment rate to remain at 4.1% for the third consecutive month.
Challenger, Gray & Christmas said the usual increase in seasonal hiring was missing, adding that companies were in a “wait-and-see period. Thomas Ryan, senior North America economist at Capital Economics, said the longer energy-driven price pressures continue, the greater the risk that they will push up prices across the wider economy. The share of consumers who said jobs were hard to get reached its highest level in more than five and a half years.
No commodities were reported to have recorded price declines. Despite low initial jobless claims, some people who have lost their jobs are facing longer periods of unemployment. Employers have not increased hiring plans as much as they typically do during the seasonal hiring period that begins in September. It was the first rate hike in three years. The Fed also indicated that borrowing costs could rise further in the coming months. The chances of another Fed rate hike in October fell after inflation data for July and August came in lower than expected. These readings had eased concerns about rising prices, reducing expectations that the central bank would tighten monetary policy again immediately. However, lower inflation readings from the summer may not continue. A survey from the Institute for Supply Management (ISM) showed that price pressures at US factories increased in September. Strong demand is running into supply constraints as the war and tariffs disrupt supply chains. Businesses are facing higher costs, changing prices and longer delivery times. The latest jobless claims figures show that layoffs remain low, but hiring plans are weak and some workers are struggling to find new jobs. the Fed’s next move will depend on how inflation, employment and other economic data develop Although markets have reduced their expectations of an October rate hike.
Initial claims for state unemployment benefits fell by 1,000 to a seasonally adjusted 197,000 in the week ended September 26. Economists polled by Reuters had expected the number to reach 200,000. New jobless claims have remained below the 200,000 mark for three consecutive weeks. The figures are close to levels last seen in 1969, pointing to historically low layoffs in the US.
Economists said healthy corporate profits and steady demand from US consumers are helping companies avoid layoffs for now, despite rising costs. Carl Weinberg, chief economist at High Frequency Economics, said companies might eventually be forced to lay off workers to protect their profits if energy and material costs remain high. However, he said there were no signs of this happening yet.
The US-Israeli war with Iran has pushed diesel prices to record highs, adding pressure on businesses.
