Key facts
- Economists polled by Reuters had forecast 195,000 initial claims for the week ended November 7.
- Claims have stayed at or below 200,000 since mid-September, close to the 189,000 level touched in mid-July.
- The 189,000 level in mid-July was the lowest since 1969, the report said.
- Veronica Clark, an economist at Citigroup, said a smaller labor force could mean fewer workers filing for unemployment insurance.
- Continuing claims exclude some unemployed people, including recent college graduates and others with little or no work history.
- Benefits are limited to 26 weeks in most states, which the report said keeps continuing claims relatively low.
Initial claims for state unemployment benefits rose 9,000 to a seasonally adjusted 200,000 for the week ended November 7, the Labor Department said on November 12. Economists polled by Reuters had forecast 195,000 claims for the week.
Claims have stayed at or below 200,000 since mid-September and remain close to the 189,000 level touched in mid-July, the lowest since 1969, the report said, raising the prospect that the labor market could be tightening. The government reported last week a surge in nonfarm payrolls in October and a decline in the unemployment rate to 4.1% from 4.2% in September.
With wages growing at a moderate pace, some economists do not believe the labor market is retightening. Others argue that a smaller workforce because of retirements and the Trump administration's immigration crackdown was the key driver of the historically low level of claims. "A generally smaller labor force could mean fewer workers to file for unemployment insurance," said Veronica Clark, an economist at Citigroup. "Of course, this would still be consistent with a low unemployment rate, with continuing claims suggesting the unemployment rate may even fall further towards around 4.0% in data by early 2027."
The claims report showed the number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, fell 20,000 to a seasonally adjusted 1.697 million during the week ended October 31. Continuing claims do not include some unemployed people, including recent college graduates and others who have little or no work history. Some people might also have exhausted their eligibility for benefits, limited to 26 weeks in most states, keeping continuing claims at relatively low levels.