US jobless claims fall to lowest in almost 42 years

Chris Papadopoullos
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Eager candidates queue for a jobs fair in Manhattan (Source: Getty)

The (albeit brief) US jobs market scare is over.

The number of people in the US filing for jobless benefits has hit its lowest proportion of the labour force since records began in 1948, quelling fears that the US labour had slowed.

Figures last month from the US Bureau of Labour showed the number of jobs added to the economy in September was only 142,000, way below economists’ estimates of 201,000. It led to speculation that the Federal Reserve may delay its first interest rate rise from record lows until further into 2016.

Initial jobless claims fell to 263,000 last week, the US Department of Labour said this afternoon.

“This strongly suggests that layoff rates remained extraordinarily low and a slowing in net job creation would thus have to be due to a decline in hiring rates, which seems unlikely to have occurred given consumers’ perceptions of job availability (the strongest in September in eight years),” said economist John Ryding from RDQ economics.

“Nonetheless, if hiring has slowed, record high levels of job openings would indicate there is a problem matching the skills of job seekers to the needs of employers, a problem that cannot be addressed with a near-zero fed funds rate.”

Economists are split as to whether the Federal Reserve will hike this year or next. The central bank was widely expected to raise rates in September but plans to do so were thrown off by a worsening outlook for the Chinese economy.

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