U.S. applications for jobless benefits were unchanged last week, settling at a healthy level as the labor market continues to show strength in the face of elevated interest rates.
Unemployment claims for the week ending March 2 were 217,000, matching the previous week’s revised level, the Labor Department reported Thursday.
The four-week average of claims, a less volatile measure, fell by 750 from the previous week to 212,250.
Weekly unemployment claims are broadly viewed as representative of the number of U.S. layoffs in a given week. They have remained at historically low levels since the pandemic purge of millions of jobs in the spring of 2020.
In total, 1.9 million Americans were collecting jobless benefits during the week that ended Feb. 24, an increase of 8,000 from the previous week and the most since November.
The Federal Reserve raised its benchmark borrowing rate 11 times beginning in March of 2022 in an effort to bring down the four-decade high inflation that took hold after the economy roared back from the COVID-19 recession of 2020. Part of the Fed’s goal was to loosen the labor market and cool wage growth, which it believes contributed to persistently high inflation.
Many economists thought the rapid rate hikes could potentially tip the country into recession, but that hasn’t happened. Jobs have remained plentiful and the economy has held up better than expected thanks to strong consumer spending.
U.S. employers delivered a stunning burst of hiring to begin 2024, adding 353,000 jobs in January in the latest sign of the economy’s continuing ability to shrug off the highest interest rates in two decades.
The unemployment rate is 3.7%, and has been below 4% for 24 straight months, the longest such streak since the 1960s.
The Labor Department issues its February jobs report on Friday.
Though layoffs remain at low levels, there has been an uptick in job cuts recently, mostly across technology and media. Google parent company Alphabet, eBay, TikTok, Snap, and Cisco Systems and the Los Angeles Times have all recently announced layoffs.
Outside of tech and media, UPS, Macy’s and Levi’s also recently cut jobs.
Jobless claims in the United States have remained stable at healthy levels, indicating a strong labor market and overall economic stability. The latest data from the Department of Labor shows that initial jobless claims for the week ending on June 5th were 376,000, which is only a slight increase from the previous week’s revised figure of 371,000. This marks the fourth consecutive week that jobless claims have remained below the 400,000 threshold, a key indicator of a healthy labor market.
The steady decline in jobless claims is a positive sign for the economy, as it suggests that businesses are not laying off workers at a high rate and that there are ample job opportunities available for those seeking employment. This is particularly encouraging given the ongoing challenges posed by the COVID-19 pandemic, which has had a significant impact on the labor market over the past year.
One factor contributing to the stability of jobless claims is the success of the vaccination rollout in the US. As more Americans become vaccinated against COVID-19, businesses are able to reopen and operate at full capacity, leading to increased demand for workers. In addition, the federal government’s stimulus measures, such as extended unemployment benefits and direct payments to individuals, have helped to support those who have lost their jobs during the pandemic and stimulate consumer spending.
While the overall trend in jobless claims is positive, there are still some areas of concern. Certain industries, such as hospitality and leisure, continue to struggle as they grapple with the effects of the pandemic. Additionally, there are disparities in jobless claims among different demographic groups, with Black and Hispanic workers experiencing higher rates of unemployment compared to their white counterparts.
Looking ahead, economists will be closely monitoring jobless claims data to gauge the strength of the labor market recovery and assess the need for further policy interventions. The Federal Reserve has signaled that it will maintain its accommodative monetary policy stance until substantial progress is made towards achieving maximum employment, indicating that it will continue to support the economy as needed.
In conclusion, the stability of jobless claims at healthy levels is a positive sign for the US economy and suggests that the labor market is on a path towards recovery. While challenges remain, particularly in certain industries and demographic groups, the overall outlook is optimistic as businesses reopen and hiring picks up.
