Jobless Claims Hit 197K as US Labor Market Enters Low-Hire, Low-Fire Phase

Initial applications for unemployment benefits came in at 197,000 for the week ended Oct. 3, below the 200,000 forecast and unchanged from the previous week's level. Claims have now hovered near 57-year lows for four consecutive weeks.

That resilience comes only days after September payroll data showed the U. S. economy added just 29,000 jobs, far below expectations and sharply weaker than August.

US Labor Market Is Becoming Low-Hire, Low-Fire The combination points toward what economists increasingly describe as a low-hire, low-fire labor market. Employers appear unwilling to cut existing workers aggressively, helped by strong corporate earnings and continued economic growth. But uncertainty around interest rates, energy prices and the broader economy is discouraging companies from expanding their payrolls.

The September jobs report showed payroll growth collapsing from the much stronger pace seen earlier in the summer. The contrast is striking. Weekly layoffs remain historically low, yet monthly job creation has slowed dramatically.

Finding a New Job Is Taking Longer Headline claims also tell only part of the story. Continuing claims, which measure people still receiving unemployment benefits after an initial filing, increased to around 1. 716 million.

At the same time, the median duration of unemployment climbed to 11. 5 weeks, the longest in more than four years. That suggests workers who already have jobs remain relatively secure, while people who lose employment are finding it increasingly difficult to secure a replacement.

The pattern is very different from the stronger August jobs report, when payroll growth surprised sharply to the upside.