The US government reported a slight increase in jobless claims on Thursday with a 2,000 increase to 208,000 for the week ended September 14. Claims dipped 13,000 to 206,000 the week before, almost a five-month low. Estimates for last week averaged at 215,000.
Key Takeaways
- Layoffs remain low despite a struggling manufacturing industry and the ongoing trade war between China and the US.
- Layoffs saw a slight increase of 2,000 but hit well below expectations of 215,000.
- The four-week moving average, a more stable measure of claims, dropped by 750 to 212,250.
The labor market continues to show strong activity in Q3 2019, with layoffs in check despite difficulties in the manufacturing industry. Claims rose in Texas, California, and North Carolina, and it’s possible that there will be in an uptick in layoffs as a result of the General Motor Co. strike which in progress.
Hiring has slowed, however, with 130,000 jobs created in August, not much more than the 100,000 or so needed to keep pace with growth in the working age population. It is unclear whether the loss of momentum is a result of tightening labor market conditions or reduced demand for labor. Job growth on average has come in at 158,000 jobs per month so far this year.
The four-week moving average of jobless claims came in at 212,250. The number of Americans continuing to receive benefits after an initial week of aid dropped 13,000 to 1.66 million for the week ended September 7, and the four-week moving average of these so-called continuing claims fell 3,750 to 1.68 million.
Federal Reserve Chairman Jerome Powell cited the labor market’s robust performance as a reason to remain optimistic about the US economy despite uncertainty and a reduction in business investment due to the trade war, and a majority of Fed officials believe that a slight adjustment to interest rates should help preserve the ongoing period of economic expansion which now stands at a record-breaking 11 years.
Jobless claims come in lower than the 4-week average again at 208,000 last week. Total insured unemployment is 1.2% with a 13,000 decrease to 1,661,000. https://t.co/BnKCM8bE5q pic.twitter.com/1G8382cnTS
— MTS Insights (@MTSInsights) September 19, 2019
Market Reaction
Gold prices have fallen today, perhaps under pressure from unexpectedly strong manufacturing activity reported by the Philadelphia Federal Reserve. Spot gold last traded at $1,502.28/oz, down -0.35% with a high of $1,509.80/oz and a low of $1,486.22/oz.
Gold Price Chart
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