Applications for US unemployment benefits fell last week to the lowest in more than three years, indicating that employers are still largely holding onto workers despite a wave of recent layoff announcements.
Initial claims decreased by 27,000 to 191,000 in the week ended Nov. 29, a period that included Thanksgiving. The weekly claims data can be particularly choppy around holidays. The figure was below all estimates in a Bloomberg survey of economists.
The four-week moving average of new applications, a metric that helps smooth out volatility, fell to 214,750 last week. That’s the lowest since January, according to Labor Department data released Thursday.
“Initial claims can be subject to big swings at this time of year, so we won’t read too much into one week’s number,” Nancy Vanden Houten, lead economist at Oxford Economics, said in a note. “Still, initial claims have remained in a range consistent with a relatively low pace of job losses despite recent layoff announcements.”
Many employers have sharply pulled back on hiring in recent months, and some large corporations — including HP Inc. and FedEx Corp. — have announced job cuts. Even so, Thursday’s data suggests actual layoffs remain limited, helping to allay concerns about a rapid deterioration in the labor market.
While continuing claims — a proxy for the number of people receiving benefits — retreated to 1.94 million in the week ended Nov. 22, they remain near the highest since 2021. The low-hire, low-fire job market has kept a lid on initial applications for unemployment benefits, but it has also limited out-of-work Americans’ ability to find a new job.
US companies shed payrolls in November by the most in over two years, driven by small businesses, according to ADP Research data released Wednesday. That report, alongside the weekly claims figures, will help inform Federal Reserve officials as they decide whether to lower interest rates for a third-straight meeting next week.
Layoff Announcements
Separate data out Thursday from Challenger, Gray & Christmas showed announced layoffs at US companies settled back last month after an October surge, but were still the highest for any November in three years. A metric of nonfarm employment from Revelio Labs declined in November, marking the fifth drop in the last seven months.
Policymakers will not yet have the government’s November jobs report in hand for their meeting. The report, originally due Dec. 5, was delayed until Dec. 16 as a result of the record-long government shutdown. That release will also include October payrolls figures.
Before adjusting for seasonal factors, initial claims also fell last week. California accounted for nearly half of the total drop in applications, followed by Texas and New York.
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