WASHINGTON, Oct 6 (Reuters) - The number of Americans filing new applications for unemployment benefits increased marginally during the last week of September, data from Haver Analytics showed, pointing to a still-low level of layoffs even as hiring has stalled.
The labor market has stagnated with businesses not firing employees on a large scale, but also reluctant to hire more workers. Economists have blamed the labor market paralysis on President Donald Trump's trade and immigration policies as well as the growing popularity of artificial intelligence, which have combined to reduce demand and labor supply.
A U.S. government shutdown, now in its sixth day, has resulted in the suspension of official data collection and publication, complicating decision-making for policymakers at the Federal Reserve, investors and households.
"While the latest claims data show no further deterioration in labor market conditions, they represent just one small piece of the picture of the labor market Fed officials rely on in setting policy," said Nancy Vanden Houten, lead U.S. economist at Oxford Economics.
"In the absence of more complete data during the shutdown, we expect the Fed to bring forward the rate cut we had expected in December to its meeting later this month."
Initial claims for state unemployment benefits increased to a seasonally adjusted 224,269 for the week ended September 27 from 218,589 in the prior week, Haver Analytics calculated.
Despite the shutdown following a lapse in government funding, states have continued to collect unemployment claims data and submit them to the Labor Department's database, which remains accessible.
RELEASE OF ECONOMIC DATA DELAYED
September's employment report scheduled for last Friday was delayed. Consumer price, producer inflation and retail sales reports due next week are also unlikely to be published.
Government data last week showed there were 0.98 job openings for every unemployed person in August, compared with 1.0 in July. With hiring sluggish, more people are experiencing long spells of unemployment and remaining on benefits for longer.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased to a seasonally adjusted 1.921 million during the week ending September 20, from 1.916 million in the prior week, Haver Analytics estimated.
Economists expect the lackluster labor market will spur the U.S. central bank to reduce borrowing costs further at its October 28-29 policy meeting.
The Fed resumed easing policy in September, cutting its benchmark overnight interest rate by 25 basis points to the 4.00%-4.25% range, to aid the labor market. But with the full inflationary effects of tariffs still to be felt, a rate cut this month is not guaranteed.
Reporting By Lucia Mutikani in Washington, Editing by Franklin Paul and Matthew Lewis
