Jobless Claims Reach Five Month Low Despite Recent Retail Layoffs
The number of workers seeking unemployment benefits fell last week to their lowest level in five months despite a rise in layoffs across retail and tech in recent months.
According to the Department of Labor, seasonally adjusted initial jobless claims for the week ended Sept. 24 totaled 193,000, a decrease of 16,000 from the previous week’s downwardly revised total of 209,000. Economists predicted filings to rise to 215,000 in the week ending Sept. 24.
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This week’s drop in claims was the lowest level since April 23 and the first time new unemployment filings fell below 200,000 since early May.
This news comes as many companies across tech and retail have trimmed staff in order to recoup losses in recent quarters as rising inflation has shifted consumer buying habits.
This month, Rent the Runway announced it will lay off about a quarter of its staff after the New York-based fashion rental company reported a net loss $33.9 million in the second quarter of fiscal year 2022.
In August, Calvin Klein and Tommy Hilfiger owner PVH Corp. announced plans to “reduce people costs” in its global offices by approximately 10% by the end of 2023. That same month, Vans owner VF Corp. confirmed it was cutting 600 office-based roles, which will impact 300 current workers and 300 open roles.
In late July, Allbirds laid off 23 people as it looked to for ways to “streamline workflows and reduce duplicative efforts.” Similarly, Shopify laid off 10% of its staff that same month, while StockX terminated 8% of its workforce in June.
Even still, the strong job market comes as the Federal Reserve continues its push to tamp down inflation. Last week, the Fed raised interest rates by 0.75 points, marking its third consecutive hike. Rates now sit in a range between 3% and 3.25% and the committee anticipates additional increases moving forward, with a goal to return inflation to 2%.
Federal Reserve chair Jerome Powell said in remarks that the U.S. economy has slowed from its historically high growth rates of 2021, though the labor market has remained tight.
While inflation has begun to show signs of cooling, consumer prices increased 8.3% in August from a year ago, down from a 40-year high of 9.1% in June and 8.5% growth in July.
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