US jobless claims remain subdued, consistent with low layoffs

Applications for US unemployment benefits rose slightly to a level that is consistent with limited number of layoffs.

Initial claims increased by 6,000 to 225,000 in the week ended Sept. 28. The median forecast in a Bloomberg survey of economists called for 221,000 applications.

The four-week moving average of new applications, a metric that helps smooth out volatility, fell to 224,250, the lowest since June 1.

Continuing claims, a proxy for the number of people receiving benefits, were little changed at 1.83 million in the previous week, according to Labor Department data released Thursday.

Weekly filings for benefits have remained subdued even as hiring has slowed this year and joblessness has risen. This is largely because employers have mostly held on to their existing workers.

The number of job cuts announced by US-based employers so far this year was little changed from a year earlier, according to outplacement firm Challenger, Gray & Christmas. A large percentage of the layoffs have come from the technology sector, which usually pays generous severance packages, Challenger said Thursday. That means those workers are less likely to seek unemployment insurance.

Still, some high-profile large corporations have announced plans to trim their workforce in recent weeks. They included health-care company CVS Health Corp., which plans to cut roughly 2,900 jobs.

Before adjusting for seasonal factors, initial claims fell last week. Georgia and Florida saw the largest declines. Michigan and Washington state had the largest increases.

Claims tend to fluctuate as a result of inclement weather, such as Hurricane Helene. There could be large swings in the data in the coming weeks due to the storm’s impact on Southeastern states.

If prolonged, a strike of dockworkers affecting US East and Gulf ports from Boston to Houston will also add to volatility in industries associated with shipping. Bloomberg Economics estimates the work stoppage could lower October payrolls by 80,000 jobs if it lasts more than two weeks.

Data on September employment will be published Friday. Economists anticipate another month of moderate payroll growth, with the unemployment rate seen unchanged at 4.2%.