The current number of jobless claims does not indicate that the labor market is cooling.
The Labor Department said Thursday that initial claims for state unemployment benefits decreased by 16,000 to 193,000 in the week ending September 24.
This is the lowest number of claims filed since late April. After the fairly low number of 213,000 claims recorded the previous week, economists anticipated a surge.
Officials of the Federal Reserve have stated that they intend to cool the labor market by increasing interest rates, as they view this as a crucial aspect of their fight against inflation. However, the labor market has been extremely hot thus far. In August, the unemployment rate was 3.7%, which is historically low and below what most economists believe is sustainable without causing excessive inflation.
If this trend persists, it could lead to additional drops in the unemployment rate, i.e. a tightening of the labor market. — Guy Berger (@EconBerger) September 29, 2022
Because the economy has been decreasing, the exceptionally high demand for workers is all the more remarkable. The government stated in a separate report on Thursday that the Gross Domestic Income, a measure of economic growth, was lower than previously estimated. The basic measure of the economy, Gross Domestic Product, fell in the first half of the year and, according to most estimates, is barely expanding in the third quarter.