Applications for jobless aid rise by most in five months

The number of Americans applying for unemployment benefits last week jumped by the most in five months, but layoffs remain historically low as the labor mar- ket continues to be largely unaffected by the Federal Reserve’s interest rate hikes.

Applications for jobless claims in the U.S. for the week ending March 4 rose by 21,000 to 211,000 from 190,000 the previous week, the Labor Department said Thursday. It’s the first time in eight weeks that claims came in above 200,000.

The four-week moving average of claims, which flattens out weekly ups and downs, rose by 4,000 to 197,000, remaining below the 200,000 threshold for the seventh straight week.

Applications for unemployment benefits are considered a proxy for layoffs.

Last month the Fed raised its main lending rate by 25 basis points, the eighth straight rate hike in its year- long battle against stubborn inflation. The central bank’s benchmark rate is now in a range of 4.5% to 4.75%, its highest level in 15 years and some analysts are forecast- ing three or more increases that would push the lower end of that rate to 5.5%.

The Fed’s rate increases are meant to cool the economy, la b or market and wages, thereby suppressing prices. But so far, none of those things has happened, at least not to the degree that the central bank had hoped.

Inflation remains more than double the Fed’s 2% target, and the economy is adding jobs at a healthy clip.

Last month, the government reported that employers added a better-than-expected 517,000 jobs in January and the unemployment rate dipped to 3.4%, the lowest since 1969. Analysts expect today’s jobs report to show the U.S. added another 208,000 jobs in February.

Fed policymakers have forecast that the unemployment rate would rise to 4.6% by the end of this year, a sizable increase historically associated with recessions.