US jobless claims fell to a more than three-year low of 191,000 last week, well below market expectations. The decline poses a new dilemma for the Federal Reserve, which is assessing labor market conditions ahead of next week’s interest rate decision.
The latest reading suggests the jobs market remains strong despite large companies announcing job cuts in recent weeks. However, such layoffs usually take time to be recorded in official data, meaning this week’s numbers may not reflect the true state of affairs.
The four-week moving average also fell to 214,750, indicating consistently lower claims momentum.
The number of Americans receiving unemployment benefits for the previous week also fell to 1.94 million, reflecting a still-tight labor market despite signs of an economic slowdown.
With the data showing a stronger-than-expected labor market, the Fed’s policy decision could become more complicated as to whether to continue easing or keep interest rates higher to curb inflationary pressures.
