U.S. jobless aid claims fell last week as layoffs remain low
Fewer Americans applied for jobless claims last week as the labor market continues to thrive despite the Federal Reserve’s efforts to cool the economy and tamp down inflation.
Applications for jobless claims in the U.S. for the week ending March 11 fell by 20,000 to 192,000 from 212,000 the previous week, the Labor Department said Thursday.
The four-week moving average of claims, which flattens out some of week-to-week volatility, fell by 750 to 196,500, remaining below the 200,000 threshold for the eighth straight week.
Applications for unemployment benefits are seen as a barometer for layoffs in the U.S.
In a note to clients, analysts at Oxford economics said there are still few signs that the recent jump in layoff announcements, particularly in the tech sector, is translating to a rise in unemployment.
“Many announced layoffs don’t end up happening, and those that have been laid off are quickly finding work elsewhere, reflecting the ongoing imbalance between labor demand and supply,” the analysts wrote.
At its February meeting, the Fed raised its main lending rate by 25 basis points, the eighth straight rate hike in its yearlong battle against stubborn inflation. With recent data showing that those rate hikes have done little to bring down inflation and even less to cool the economy and labor market, many analysts were expecting the Fed to raise rates by another half-point when it meets next week.
However, the second- and third-largest bank failures in U.S. history over the last week — which have been blamed in large part to rising interest rates — have some economists thinking Fed officials will tread more lightly next week and either raise its rate by 25 basis points or perhaps not at all.
The central bank’s benchmark rate is now in a range of 4.5 percent to 4.75 percent, its highest level in 15 years. Before the banking sector turmoil that began last week, the Fed had signaled that two more rate hikes were likely this year. Some analysts had even forecast three increases that could push the lower end of that rate to 5.5 percent.
The Fed’s rate increases are meant to cool the economy, labor market and wages, thereby suppressing prices. But so far, none of those things have happened, at least not to the degree that the central bank had hoped.
Inflation remains more than double the Fed’s 2 percent target, and the economy is growing and adding jobs at a healthy clip.