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The number of Americans filing new claims for unemployment benefits dropped to an eight-month low last week, but a rebound is likely as a partial strike by the United Auto Workers (UAW) union forces automobile manufacturers to temporarily lay off workers because of shortages of some materials.
The report from the Labour Department yesterday offered an upbeat assessment of the jobs market, with the number of people on unemployment rolls also falling during the first week of September to the lowest level since January. Though demand for labor is slowing, overall labor market conditions have remained tight despite higher interest rates.
“The US labour market continues to outperform expectations,” said Eugenio Aleman, chief economist at Raymond James.
Initial claims for state unemployment benefits dropped 20,000 to a seasonally adjusted 201,000 for the week ended September 16, the lowest level since January, the Labour Department said. Economists polled by Reuters had forecast 225,000 claims for the latest week.
Claims are in the lower end of their 194,000-265,000 range for this year. Unadjusted claims rose only 67 to 175,661 last week. There were notable declines in claims in Indiana and California, which mostly offset sizeable increases in South Carolina, New York and Georgia.
The UAW last week launched a targeted strike against Ford, GM and Stellantis, impacting one assembly plant at each company. It has threatened to broaden the work stoppages, which for now only involve about 12,700 of the affected 146,000 UAW members.
Though striking workers are not eligible for unemployment benefits, the walkout has snarled supply chains. Continuing claims remain historically low, a reminder that labour market conditions are still tight.
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