Unemployment Claims Remain Low as Wage Growth Slides

Initial jobless claims remained low last week, according to new Labor Department data.

Government figures released Thursday (Oct. 5) showed initial claims inching up to 207,000 for the week ending Sept. 30, below the estimates by Bloomberg and Dow Jones economists projecting 210,000 claims.

The report also showed continuing claims — a measure of people collecting unemployment benefits — down slightly from previous weeks at 1.66 million.

Initial claims have hovered just above 200,000 for the past several weeks, historically low levels said to indicate a strong labor market.

This week also saw ADP release its monthly employment report, showing private employers adding 89,000 jobs in September, the slowest rate of growth in nearly three years.

“We are seeing a steepening decline in jobs this month,” ADP Chief Economist Nela Richardson said. “Additionally, we are seeing a steady decline in wages in the past 12 months.”

The 89,000 figure was a steep drop from last month’s report, which showed employers adding 180,000 jobs. ADP said the biggest gains came from the leisure and hospitality space (92,000 jobs) construction industry (16,000 jobs). Cutting jobs were the manufacturing sector (12,000 jobs) and professional and business services (32,000 jobs).

ADP found that people who remained with their jobs saw pay increases of 5.9% year over year, making September the 12 consecutive month of slowing growth.

“Pay gains also shrank for job changers, to 9 percent, down from 9.7 percent in August,” the report said.

Another survey this week, this one by Morning Consult, showed that the share of consumers with declining incomes had risen to 11.8% in September, compared to 10.7% in August.

Meanwhile, recent PYMNTS Intelligence found that 72% of workers say their wages have barely kept up with inflation, or not kept pace at all.

Data from the latest “Consumer Inflation Sentiment Report” showed that 40% of workers believe that their salary doesn’t meet their expectations, a sentiment shared by close to half of those who make under $50,000 each year.

“While consumers expect inflation to drop back to pre-2021 levels by January 2025, consumers’ purchasing power is still 11% lower than it was two years ago,” PYMNTS wrote recently. “To counter the erosion of their purchasing power, consumers are actively seeking additional work or even switching jobs to find better salary prospects.”