The initial unemployment insurance claims fell far below expectations last week, helping to pay attention to the labour market being at risk in the Federal Reserve and elsewhere.
The first applications for the week ended September 20, totaling seasonally adjusted 218,000, down 14,000 from the previous week’s upward revision figure, significantly lower than the Dow Jones Consensus estimate of 235,000, the Labor Department reported Thursday.
Continuous bills running one week late have changed little, falling from 2,000 to 1,926 billion.
The release comes just a week after the Federal Reserve voting in the 4%-4.25% range by a quarter point lowering its benchmark borrowing rate.
In a statement after it was released on September 17, the Federal Open Market Committee said that part of the reason for the initial mitigation in 2025 was “the risk of employment shortcomings increased.” In fact, non-farm pay growth has slowed down to cra, and job posting levels are low for multiple years.
However, billing data shows that despite bumps at the beginning of the month, businesses are still reluctant to classify them as workers, even if employment drops significantly.
The billing data may be unstable, with Texas showing a big turnover in recent weeks. The state recorded a decline in nearly 7,000 submissions last week, according to unadjusted figures.
Despite growing concerns that the economy could slow backwards this year, economic data remains fairly solid, with other reports confirmed fundamental strength on Thursday.
Gross domestic product, the broadest measure of economic growth, recorded a profit of 3.8% in the second quarter. The report reflects an unusually large upward adjustment caused by the Bureau of Economic Analysis’s revisions to consumer spending. GDP fell 0.6% in the first quarter, a slight downshift from previous estimates.
Personal consumption expenditure, driving around two-thirds of the $30 trillion US economy, rose 2.5%, well above 1.6% on the second estimate, outperforming 0.6% in the first quarter.
In yet another indication of strength, spending on long-term items such as planes, appliances and computers increased by 2.9% in August, but fell 0.4% from July figures, compared to forecasts that showed a 2.7% decline.
Even with excluded transportation, new orders for so-called durable goods increased by 0.4%, and 1.9% when excluded defense.
Fed officials have looked closely at economic data for clues as to where policies should be next taken, with recent reports showing most bright pictures.
The weakest location, the home, has recently shown some signs, with sales of newly built homes of 20.5% in August, the biggest profit since January 2022.
Despite the robust data, the market expects the Fed to cut twice more this year at its October and December meetings.
In a speech Tuesday, Chairman Jerome Powell said the economy is “showing resilience amidst significant changes in trade and immigration policies as well as fiscal, regulatory and geopolitical sectors.”
Still, he leaves more room for ease, noting that the policy still “conservatively limits” growth.
