On Thursday, the Department of Labor said in its weekly report that U.S. unemployment allowance applications dropped to 196,000 during the second week of September, representing the lowest figure since July and indicating that while the labour market remains adjusted with a slow recruitment rate, dismissals remain less frequent.
Unemployment allowance applications so far remain in the range of 200,000 and 230,000 per week, although the labour market has also been one of the sectors most affected by the economic and political uncertainty provoked by the conflict in the Middle East.
The unemployment rate remains at 4%, while the economy is recovering with the creation of 162,000 jobs during the month of August, according to data from the Bureau of Labor Statistics (BLS); however, they continue to be below the 166,000 monthly jobs registered in 2023 and 2024 or the 491,000 monthly jobs in 2021 and 2022 during the largest recruitment boom.
The health of the labor market is a key indicator for Federal Reserve decision-making, which during its recent meeting raised interest rates for the first time in three years in the face of strong inflationary pressures.
However, both Federal Reserve Chairman Kevin Warsh and the Federal Open Market Committee (FOMC) agreed that market conditions are currently being favorable as well as to raise federal fund rates. “Employment creation has followed the pace of the workforce, and the unemployment rate has barely varied,” the Committee said.
While, in his speech on Wednesday after the meeting, Warsh noted that the U.S. economy seems to be strengthening, mentioning labor market data as a good indicator.
