The number of Americans filing for unemployment benefits decreased slightly last week, signaling a robust labor market with most workers enjoying strong job security.
According to the Labor Department’s report on Thursday, jobless claims fell by 2,000 to 210,000. The four-week average of claims, which smooths out weekly fluctuations, rose by 2,500 to 211,250.
In total, 1.8 million Americans were receiving unemployment benefits in the week ending March 9, up by a modest 4,000 from the previous week.
Unemployment benefit applications are seen as a gauge for layoffs and an indicator of the job market’s direction. Despite notable job cuts at tech giants like Google parent Alphabet, eBay, and Cisco Systems, overall layoffs remain below pre-pandemic levels. The unemployment rate, which stood at 3.9% in February, has stayed below 4% for 25 consecutive months, marking the longest such streak since the 1960s.
The economy and the job market, buoyed by consumer spending, have shown resilience even as the Federal Reserve raised interest rates 11 times in 2022 and 2023 to combat inflation that surged in 2021. Inflation has since declined from a four-decade high of 9.1% in June 2022 to 3.2% in February but remains above the central bank’s 2% target.
While hiring has slowed from the rapid pace of three years ago, it remains strong. Employers added a record 604,000 jobs per month in 2021, 377,000 in 2022, and 251,000 last year. In February, job creation unexpectedly rose to 275,000.
“Overall, layoffs remain at low levels,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “We expect job growth to slow somewhat but the unemployment rate to remain low this year.”
The combination of easing inflation and a robust economy has raised hopes that the Fed can achieve a “soft landing,” controlling price increases without pushing the economy into a recession. On Wednesday, the Fed indicated its expectation to reverse policy and cut rates three times this year, signaling confidence in progress against inflation.
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