The number of Americans applying for jobless benefits rose to their highest level in two months last week, but layoffs remain at historically low levels as the labor market continues to chug along despite elevated interest rates.
Quick Read
- Rise in Jobless Claims: Last week, the U.S. saw a spike in jobless claims to 221,000, marking the highest level in two months, but layoffs are still relatively low historically.
- Four-Week Average: The average claims over four weeks increased slightly to 214,250, indicating some stability despite weekly fluctuations.
- Jobless Benefits: Approximately 1.79 million Americans were receiving jobless benefits, a slight decrease from the week before.
- Labor Market Resilience: Despite the Federal Reserve’s aggressive interest rate hikes to combat inflation, the labor market has remained robust, with strong job additions and low unemployment rates.
- Economic Conditions: The economy continues to perform well, largely supported by sustained consumer spending, even as some feared the Fed’s actions might lead to a recession.
- Recent Job Cuts: Notable layoffs have been reported mainly in the tech and media sectors, with companies like Alphabet, eBay, and Amazon announcing job reductions, alongside cuts in other industries by firms such as UPS and Macy’s.
The Associated Press has the story:
US applications for jobless benefits rise to highest level in two months
Newslooks- (AP)
The number of Americans applying for jobless benefits rose to their highest level in two months last week, but layoffs remain at historically low levels as the labor market continues to chug along despite elevated interest rates.
The Labor Department reported Thursday that filings for unemployment claims for the week ending March 30 climbed by 9,000 to 221,000 from the previous week’s 212,000.
The four-week average of claims, which evens out some of the weekly volatility, rose modestly to 214,250, an increase of 2,750 from the previous week.
In total, 1.79 million Americans were collecting jobless benefits during the week that ended March 23, a decline of 19,000 from the previous week.
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 the spring of 2020.
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 jobs have remained plentiful and the economy has held up better than expected thanks to strong consumer spending.
In February, U.S. employers added a surprising 275,000 jobs, again showcasing the U.S. economy’s resilience in the face of high interest rates.
At the same time, the unemployment rate ticked up two-tenths of a point in February to 3.9%. Though that was the highest rate in two years, it is still low by historic standards. And it marked the 25th straight month in which joblessness has remained below 4% — the longest such streak since the 1960s.
The March jobs report comes out 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, Amazon, Cisco Systems and the Los Angeles Times have all recently announced layoffs.
Outside of tech and media, UPS, Macy’s and Levi Strauss also have recently cut jobs.
