Jobless befefit applications still at historically low levels
The number of Americans applying for unemployment benefits was unchanged last week and remains historically low as the labor market continues to show resiliency in the face of high interest rates and elevated inflation.
The Labor Department reported Thursday that unemployment claims for the week ending Saturday was 208,000, the same as the previous week. That’s the fewest since mid-February.
The four-week average of claims, which softens some of the weekly volatility, fell by 3,500 to 210,000.
Weekly unemployment claims are considered a proxy for the number of U.S. layoffs in a given week and a sign of where the job market is headed. They have remained at historically low levels since the pandemic purge of millions of jobs in spring 2020.
The Federal Reserve raised its benchmark borrowing rate 11 times beginning in March 2022 in a bid to stifle the four-decade high inflation that took hold after the economy rebounded from the COVID-19 recession of 2020. The Fed’s intention was to loosen the labor market and cool wage growth, which it said contributed to persistently high inflation.
Many economists thought there was a chance the rapid rate hikes could cause a recession, but jobs have remained plentiful and the economy forged on thanks to strong spending by U.S. consumers.
Last month, U.S. employers added a surprising 303,000 jobs, yet another example of the U.S. economy’s resilience in the face of high interest rates. The unemployment rate dipped from 3.9% to 3.8% and has now remained below 4% for 26 straight months, the longest such streak since the 1960s.
There are signs that the labor market may be softening. Earlier this week, the government reported 8.5 million job openings, the lowest number of vacancies in three years.
Though layoffs remain at low levels, companies have been announcing more job cuts recently, mostly across technology and media. Google parent company Alphabet, Apple and eBay have recently announced layoffs.
Outside of tech and media, Peloton also has recently cut jobs.
In total, 1.77 million Americans were collecting jobless benefits during the week that ended April 20. That’s also the same as the previous week.