WASHINGTON, Nov 21 (Reuters) – The number of Americans filing new applications for unemployment benefits fell to a seven-month low last week, suggesting that job growth likely rebounded in November after abruptly slowing last month amid hurricanes and strikes.
It is, however, taking longer for laid-off workers to find new jobs, posing an upside risk to the unemployment rate. The report from the Labor Department on Thursday also showed unemployment rolls swelling to levels last seen in late 2021.
Labor market slack keeps the door open to a third interest rate cut from the Federal Reserve next month, despite a recent lack of progress lowering inflation to its 2% target.
“There is little evidence of large layoffs taking place,” said Gisela Hoxha, an economist at Citigroup. “However, in a low hiring environment those individuals that are laid off are finding it harder to get a new job and are remaining on unemployment benefits for longer, which implies upside risk to the unemployment rate.”
Initial claims for state unemployment benefits dropped 6,000 to a seasonally adjusted 213,000 for the week ended Nov. 16, the lowest reading since April. Economists polled by Reuters had forecast 220,000 claims for the latest week.
The data included the Veterans Day holiday, which could have injected some volatility.
Unadjusted claims decreased 17,750 to 213,035 last week. Filings in California dropped 4,657, almost reversing the prior week’s 5,906 jump. The state offered no comment for that increase. There were also notable declines in applications in New Jersey, Ohio, Georgia, Texas and Indiana.
Filings had surged in New Jersey and Texas in the prior week, blamed on layoffs in the educational services industry as well as the healthcare and social assistance sector.
Though overall claims soared in early October amid disruptions caused by Hurricanes Helene and Milton as well as strikes by factory workers at Boeing (BA.N), opens new tab and another aerospace company, layoffs have remained low. That is softening the hit on the labor market from sluggish hiring.
The claims data covered the period during which the government surveyed businesses for the nonfarm payrolls component of November’s employment report. Claims dropped by 29,000 between the October and November payrolls survey weeks.
Stocks on Wall Street traded higher. The dollar was steady against a basket of currencies. U.S. Treasury yields were little changed.
