More Americans filed jobless benefits last week but layoffs remain at historically low levels despite elevated interest rates and a flurry of job cuts in the media and technology sectors. Applications for unemployment benefits rose to 214,000 for the week ending Jan. 20, an increase of 25,000 from the previous week, the Labor Department reported Thursday.
Quick Read
Key Points of Recent U.S. Jobless Claims and Layoffs:
- Increase in Jobless Claims: Applications for unemployment benefits rose to 214,000 for the week ending Jan. 20, marking an increase of 25,000 from the previous week.
- Four-Week Average of Claims: The less volatile four-week average of claims decreased slightly, falling by 1,500 to 202,250.
- Continued Low Levels of Layoffs: Despite the recent increase in jobless claims, layoffs remain historically low in the broader U.S. economy.
- Sector-Specific Layoffs: There has been a noticeable uptick in job cuts, particularly in the technology and media sectors, with companies like eBay, Google, TikTok, Riot Games, and Amazon announcing layoffs.
- Significant Layoffs in News Industry: The news industry has seen widespread layoffs and buyouts, impacting organizations like the Los Angeles Times, The Washington Post, NPR, CNN, and Vox Media.
- Federal Reserve’s Interest Rate Hikes: The Fed raised its benchmark rate 11 times since March 2022 to combat high inflation, though it has held rates steady in its last three meetings.
- Inflation Easing but Still Above Target: Inflation has decreased over the past year, but overall prices remain above the Fed’s 2% target, indicating ongoing challenges in stabilizing the economy.
- Possible Rate Cuts in 2024: Most economists predict the Federal Reserve will implement multiple rate cuts this year.
- Resilience of the U.S. Economy: Contrary to recession predictions, the U.S. economy and job market have remained robust, with the unemployment rate staying below 4% for an extended period.
- Total Jobless Benefit Recipients: As of the week ending Jan. 13, approximately 1.83 million Americans were receiving jobless benefits, an increase from the previous week.
The recent jobless claims data reflect the mixed state of the U.S. economy, with certain sectors experiencing layoffs while the broader labor market maintains low levels of unemployment and overall economic resilience amidst high inflation and interest rate hikes by the Federal Reserve.
The Associated Press has the story:
US applications for jobless benefits rise, but layoffs remain at historically low levels
Newslooks- (AP)
More Americans filed jobless benefits last week but layoffs remain at historically low levels despite elevated interest rates and a flurry of job cuts in the media and technology sectors.
Applications for unemployment benefits rose to 214,000 for the week ending Jan. 20, an increase of 25,000 from the previous week, the Labor Department reported Thursday.
The four-week average of claims, a less volatile measure, fell by 1,500 to 202,250.
Weekly unemployment claims are viewed as representative for the number of U.S. layoffs in a given week. They have remained at extraordinarily low levels despite high interest rates and elevated inflation.
Though layoffs remain at low levels, there has been an uptick in job cuts recently across technology and media.
San Jose, California-based eBay is the latest tech company to roll out a series of layoffs after quickly ramping up hiring during the COVID-19 pandemic while people spent more time and money online. The online auction site said Tuesday that it is laying off 1,000 workers.
This month, Google said it was laying off hundreds of employees working on its hardware, voice assistance and engineering teams, while TikTok said its shedding dozens of workers in ads and sales and video game developer Riot Games was trimming 11% of its staff.
Amazon said this month that it’s cutting several hundred jobs in its Prime Video and MGM Studios unit.
On Tuesday, the Los Angeles Times said it was cutting 20% of its newsroom, at least 115 employees.
Layoffs and buyouts have hit a wide swath of the news industry over the past year. The Washington Post, NPR, CNN and Vox Media are among the many companies hit.
An estimated 2,681 news industry jobs were lost through the end of November.
The Federal Reserve raised its benchmark rate 11 times beginning in March of 2022 in an effort to squelch the four-decade high inflation that took hold after an unusually strong economic rebound from the COVID-19 recession of 2020.
Though inflation has eased considerably in the past year, the Labor Department reported recently 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 most economists are forecasting multiple rate cuts this year.
As the Fed rapidly jacked up rates in 2022, most analysts predicted that the U.S. economy would tip into recession. But the economy and the job market remained surprisingly resilient, with the unemployment rate staying below 4% for 23 straight months, the longest such streak since the 1960s.
Overall, 1.83 million Americans were collecting jobless benefits during the week that ended Jan. 13, an increase of 27,000 from the previous week.
