The numbers: The number of Americans who applied for unemployment benefits last week fell to a five-week low of 209,000, indicating the U.S. labor market is still quite sturdy, but the report also contained a hint of trouble.
New jobless claims dropped 24,000 from a revised 233,000 in the prior week, the government said Wednesday. Economists had forecast new claims in the week ending Nov. 18 to total 229,000.
While layoffs are still historically low, other reports show that businesses are hiring fewer people and a tight labor market appears to have loosened up a bit.
The claims report also included signs of weakness. Actual claims — before seasonal adjustments, that is — rose to the highest level since the summer.
Key details: The number of unadjusted claims topped 200,000 for the third week in a row and touched the highest level since July at 238,677. They had totaled less than 200,000 a month from August until the end of October.
New jobless claims also rose in 39 states and territories that report these figures to the federal government. They fell in just 14 other states.
Unemployment claims typically surge above 300,000 and eventually go a lot higher when a recession approaches. So far the economy does not appear to be in the danger zone.
The number of people collecting unemployment benefits in the U.S., meanwhile, declined for the first time in eight weeks to 1.84 million.
Still, the gradual rise in these so-called continuing claims is a sign it’s taking longer for people to find new jobs.
The report was released a day early because of the Thanksgiving holiday. Economists caution that jobless claims tend to gyrate sharply around the holiday season and should be viewed with caution.
Big picture: The economy surged in the late spring and summer, but higher interest rates appear to be taking a toll. Americans have put off purchases for homes, cars and other big-ticket items and businesses have curbed production in anticipation of slower sales.
Yet as long as unemployment remains low, consumers will have the income to keep spending — and to keep the U.S. out of recession.
Looking ahead: “We remain of the opinion that the labor market is becoming increasingly vulnerable, and the turning point is likely at the end of this year or early 2024,” said U.S. economist Thomas Simons of Jefferies in a note to clients.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to open higher in Wednesday trading.
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