The numbers: Applications for U.S. unemployment benefits fell in the first week of October and clung near a 50-year low, suggesting that layoffs still haven’t risen much even as hiring and the economy have slowed.
Initial jobless claims, a rough way to measure layoffs, declined by 10,000 to 210,000 in the seven days ended Oct. 5, the government said Thursday.
Economists polled by MarketWatch estimated new claims would total a seasonally adjusted 220,000.
Claims remained elevated in Ohio and Michigan, two states with large auto industries. Some 250,000 workers have been on strike for nearly a month and the prolonged standoff has forced parts suppliers to idle workers as well.
Once workers return to work and get back pay, they have to return any government benefits they received to tide them over.
The more stable monthly average of new claims, meanwhile, edged up by 1,000 to 213,750 nationwide. The four-week average usually gives a more accurate read into labor-market conditions than the more volatile weekly number.
The number of people already collecting unemployment benefits, known as continuing claims, increased by 29,000 to 1.68 million. These claims have been below 2 million since early 2017.
Big picture: The U.S. labor market has cooled off along with the economy. The number of job openings have fallen 8% since January and hiring has also slowed sharply.
Economists blame the ongoing trade war with China and the waning effects of the Trump tax cuts of 2017, among other things. The U.S. can avoid recession, however, if layoffs and unemployment remain low and consumers remain fairly confident in the economy, they say.
What they are saying? “Firms have sharply cut back hiring plans, without increasing the pace of layoffs,” said chief economist Ian Shepherdson of Pantheon Macroeconomics. “ That’s normal in the early stages of a downturn. If growth slows further, as we expect, layoffs will rise in due course.”
Market reaction: The Dow Jones Industrial Average
and S&P 500
rose in Thursday trades for the second straight day. Stocks broke a recent slide the day before on renewed hopes that U.S.-China trade tensions will ease as both countries resume talks.
The 10-year Treasury yield
jumped to 1.65%.