The number of Americans filing new jobless claims fell more than expected last week, but this likely did not change the view that the labor market is slowing amid higher interest rates.
Initial claims for U.S. national jobless benefits fell by 24,000 to a seasonally adjusted 209,000 for the week ended Nov. 18, the Labor Department reported on Wednesday. Economists even forecast 226,000 claims for the latest week.
The data shows the labor market is slowly easing as higher borrowing costs dampen demand.
Minutes of the Federal Reserve meeting from Oct 31 to Nov 1 published on Tuesday indicated that although policymakers saw labor market conditions "still remain tight".
Easing market conditions coupled with declining inflation have led financial markets to conclude that the US central bank is done raising interest rates in the current cycle. On the other hand, financial markets are predicting a rate cut in mid-2024, based on the FedWatch Tool.
Since March 2022, the Fed has raised the policy rate by 525 basis points to the current range of 5.25%-5.50%.
Although the labor market is gradually improving, there are signs that it is becoming more flat. According to the Bank of America Institution, internal data analysis shows an increase in "payment disruptions" throughout 2023, in line with an increase in unemployment.
