The number of Americans applying for unemployment benefits inched down to its lowest level in nearly three months last week as the U.S. labor market continues to flex its muscle in spite of elevated interest rates. Jobless claim applications fell to 202,000 for the week ending Jan. 6, down by 1,000 from the previous week, the Labor Department reported Thursday. The four-week average of claims, which evens out some of the week-to-week volatility, ticked down by 250 to 207,750.
Quick Read
- Lowest Unemployment Claims in Three Months: The number of Americans applying for unemployment benefits dropped to its lowest level in nearly three months.
- Latest Figures: Jobless claim applications decreased to 202,000 for the week ending January 6, a slight reduction from the previous week.
- Stable Weekly Claims: The four-week average of claims, which smooths out weekly volatility, also decreased marginally to 207,750.
- Resilience Despite High Interest Rates: The labor market remains strong in the face of high interest rates and elevated inflation.
- Federal Reserve’s Interest Rate Hikes: In response to high inflation, the Federal Reserve raised its benchmark interest rate 11 times since March 2022.
- Inflation Easing, But Still Above Target: Although inflation has slowed from its peak last year, it remains above the Fed’s 2% target.
- Potential for Rate Cuts: The Fed has paused rate hikes in its last three meetings and indicated the possibility of cutting rates three times in the upcoming year.
- Economic Resilience: Despite rapid interest rate increases, the U.S. economy and job market have shown surprising resilience, avoiding a recession and maintaining a low unemployment rate.
- Historic Unemployment Rate: The unemployment rate has been below 4% for 22 consecutive months, the longest streak since the 1960s.
- Hope for a ‘Soft Landing’: The combination of slowing inflation and low unemployment has raised hopes for the Federal Reserve achieving a ‘soft landing’, where inflation is controlled without triggering a recession.
- Continuing Jobless Benefits: As of the week ending December 30, approximately 1.83 million Americans were collecting jobless benefits, showing a decrease from the previous week.
The Associated Press has the story:
US applications for jobless benefits fall to lowest level in 12 weeks
Newslooks- (AP)
The number of Americans applying for unemployment benefits inched down to its lowest level in nearly three months last week as the U.S. labor market continues to flex its muscle in spite of elevated interest rates.
Jobless claim applications fell to 202,000 for the week ending Jan. 6, down by 1,000 from the previous week, the Labor Department reported Thursday. The four-week average of claims, which evens out some of the week-to-week volatility, ticked down by 250 to 207,750.
Weekly unemployment claims are a proxy for layoffs. They have remained at extraordinarily low levels in the face of high interest rates and elevated inflation.
In an effort to stomp out the four-decade high inflation that took hold after an unusually strong economic rebound from the COVID-19 recession of 2020, the Federal Reserve raised its benchmark rate 11 times since March of 2022.
Though inflation has eased considerably in the past year, the Labor Department reported Thursday that overall prices rose 0.3% from November and 3.4% from 12 months earlier, a sign that the Fed’s drive to slow inflation to its 2% target will likely remain a bumpy one.
The Fed has left rates alone at its last three meetings and has signaled that it could cut rates three times this year.
As the Fed rapidly jacked up rates in 2022, most analysts thought that the U.S. economy would slide into recession. But the economy and the job market remained surprisingly resilient, with the unemployment rate staying below 4% for 22 straight months. That’s the longest such streak since the 1960s.
The combination of decelerating inflation and low unemployment has raised hopes that the Fed is managing a so-called soft landing: raising rates just enough to bring down prices without causing a recession.
Overall, 1.83 million Americans were collecting jobless benefits during the week that ended Dec. 30, a decrease of 34,000 from the previous week.
