Hiring in marketing is down 23% since 2018

The number of Americans filing new unemployment claims dropped to a seven-month low last week, signaling a potential rebound in job growth for November following a temporary slowdown caused by hurricanes and strikes. However, laid-off workers are taking longer to find new jobs, which could push the unemployment rate higher.

The Labor Department's report on Thursday also revealed an increase in continuing unemployment claims, reaching levels last seen in late 2021. This labor market softness leaves room for the Federal Reserve to consider a third interest rate cut next month, even as progress toward its 2% inflation target remains slow.

“There is little evidence of widespread layoffs,” said Gisela Hoxha, an economist at Citigroup. “However, in a low-hiring environment, individuals who are laid off are struggling to find new jobs and are staying on unemployment benefits longer, posing an upside risk to the unemployment rate.”

Key Data Highlights

• Initial jobless claims fell by 6,000 to a seasonally adjusted 213,000 for the week ending Nov. 16, marking the lowest level since April.
• Economists polled by Reuters had forecast 220,000 claims for the week.
• Unadjusted claims dropped by 17,750 to 213,035.

Regional Trends

Filings in California declined by 4,657, nearly offsetting a 5,906 increase from the prior week, though the state provided no explanation for the fluctuation. Significant decreases in claims were also reported in New Jersey, Ohio, Georgia, Texas, and Indiana. Earlier surges in New Jersey and Texas had been attributed to layoffs in educational services, healthcare, and social assistance sectors.

Despite disruptions from Hurricanes Helene and Milton and strikes at Boeing and another aerospace company in early October, layoffs have remained relatively low, mitigating the overall impact on the labor market amid slower hiring.

Labor Market Indicators

The claims data aligns with the reference period for the government’s nonfarm payrolls survey for November. Initial claims dropped by 29,000 between the October and November survey weeks, suggesting a possible pickup in employment.

Market Reaction

• U.S. stocks traded higher on the news.
• The dollar held steady against a basket of currencies.
• Treasury yields showed little change.

This resilience in the labor market, despite ongoing challenges, underscores the complexities facing policymakers as they weigh inflation, growth, and employment in upcoming decisions.