Weekly applications for US jobless benefits fall to the lowest level in 4 months

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The number of Americans applying for unemployment benefits fell to their lowest level in four months last week

The number of Americans applying for unemployment benefits fell to their lowest level in four months last week.

Jobless claims slid by 12,000, to 219,000, for the week of Sept. 14, the Labor Department reported Thursday. That's fewer than economists' expectations for 230,000 new filings.

Weekly filings for unemployment benefits, considered largely representative of layoffs, had risen moderately since May before this week's decline. Though still at historically healthy levels, the recent increase signaled that high interest rates may finally be taking a toll on the labor market.

In response to weakening employment data and receding consumer prices, the Federal Reserve on Wednesday cut its benchmark interest rate by a half of a percentage point as the central bank shifts its focus from taming inflation toward supporting the job market. The Fed's goal is to achieve a rare “soft landing,” whereby it curbs inflation without causing a recession.

“The focus has now decisively shifted to the labor market, and there’s a sense that the Fed is trying to strike a better balance between jobs and inflation,” said Stephen Innes of SPI Asset Management.

It was the Fed’s first rate cut in four years after a series of rate hikes in 2022 and 2023 pushed the federal funds rate to a two-decade high of 5.3%.

Inflation has retreated steadily, approaching the Fed’s 2% target and leading Chair Jerome Powell to declare recently that it was largely under control.

During the first four months of 2024, applications for jobless benefits averaged just 213,000 a week before rising in May. They hit 250,000 in late July, supporting the notion