Layoffs remain minimal despite signs of a cooling US job market

WASHINGTON, D.C.: Fewer Americans applied for unemployment benefits last week, marking the lowest level in six months, as layoffs remain minimal despite signs of a cooling job market.

The Labor Department reported that initial jobless claims fell by 4,000 to 217,000 for the week ending November 9, below analysts' expectations of 225,000.

The four-week average, a more stable measure, also dropped by 6,250 to 221,000. Weekly jobless claims are viewed as a key indicator of layoffs across the U.S. economy.

In response to slower job growth and easing inflation, the Federal Reserve has shifted its approach, cutting its benchmark interest rate twice in recent months.

A half-point cut in September marked the first reduction in four years, followed by a quarter-point cut last week. These moves signal the Fed's pivot from focusing solely on taming inflation to supporting the labor market in hopes of achieving a "soft landing"-lowering inflation without triggering a recession.

Inflation, which had surged to multi-decade highs, has steadily retreated over the past two years and is now nearing the Fed's two percent target. Recently, an inflation gauge closely monitored by the Fed hit its lowest level in three-and-a-half years.

Federal Reserve Chair Jerome Powell has acknowledged that inflation is essentially under control, enabling the central bank to adjust its strategy.

The job market, however, has shown signs of moderation. Jobless claims averaged 213,000 per week during the first four months of 2024 but rose sharply in May and peaked at 250,000 in late July. October saw just 12,000 new jobs added, with economists attributing the slowdown to factors like strikes and hurricanes temporarily impacting payrolls.

Revised data from the Labor Department in August revealed that the U.S. economy added 818,000 fewer jobs between April 2023 and March 2024 than initially reported, further indicating a gradual cooling of the labor market.

Meanwhile, continuing claims-the number of Americans receiving unemployment benefits-fell to 1.87 million for the week ending November 2, aligning with analysts' forecasts. While the job market has softened, the low level of layoffs suggests underlying resilience as the Fed navigates its delicate balance between inflation control and economic growth.