US labour market remains tight despite technology sector layoffs

The number of Americans filing new claims for unemployment benefits fell last week, showing widespread layoffs remain low despite a surge in technology-sector job cuts that has raised fears of an imminent recession, reports Reuters. The weekly jobless claims report from the Labor Department yesterday, the most timely data on the economy’s health, suggested the labour market remained tight.

That, together with solid consumer spending, keeps the Federal Reserve on track to continue raising interest rates, though at a slower pace amid signs inflation was starting to subside.

“This is a testimony to how tight the labour market remains,” said Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia.

Initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 222,000 for the week ended November 12. Economists polled by Reuters had forecast 225,000 claims for the latest week.

There has been an increase in layoffs in the technology sector, with Twitter, Amazon and Meta, the parent of Facebook, announcing thousands of job cuts this month. Companies in interest-rate sensitive sectors like housing and finance are also letting workers go. The layoffs have so far not been evident in official data.