Chip Somodevilla/Getty ImagesApplications for unemployment benefits in the U.S. fell to the lowest level since January, a level so low that it challenges the notion that supply and demand conditions in the labor market were reaching a better balance.
Claims have fallen in five out of the last six weeks, indicating that employers are keeping workers on payrolls as consumer demand has held up much better than expected and the economy appears to be growing at the fastest pace of the year. On Wednesday, Federal Reserve officials updated their outlooks for the economy. The media expectation is now for the economy to grow 2.1 percent this year. In August, the Philly Fed’s survey of professional forecasters indicated that economists expect the economy to grow 0.6 percent in the third quarter and to be flat in the fourth quarter. The Atlanta Fed’s GDPNOW barometer of growth indicated on Wednesday that the economy appears to be growing at an annual rate of 4.
Initial claims are a proxy for layoffs. They typically reflect demand for labor, rising when demand for workers is declining and falling when demand for workers is rising.
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