Jobless claims recede as labor market stays strong

Fewer Americans applied for unemployment benefits last week, as layoffs continue to decline amid a sharp rise in the labor market.

Unemployment claims fell from 15,000 to 214,000 during the week ending March 12, down from 229,000 the previous week, the Labor Department said Thursday. First-time applications for unemployment benefits generally follow the pace of layoffs.

The four-week average of claims, offsetting weekly volatility, fell to 223,000 from 231,750 the previous week. In all, 1,419,000 Americans, at least 50 years old, were receiving unemployment benefits in the week ending March 5, 71,000 less than the previous week.

Earlier this month, the government reported that employers added 678,000 jobs in February, the highest monthly total since July. The unemployment rate fell to 3.8% from 4% in January, extending a sharp drop in unemployment to its lowest level since before the outbreak of the pandemic. two years.

US companies recorded an almost record level of job openings in January (11.3 million), a trend that has helped keep workers’ wages rising and increased inflationary pressures.

“Labor demand remains strong and companies continue to report shortages,” Rubeela Farooqi, chief economist at U.S. High Frequency Economics, said in a statement. “That should keep layoffs low, for now.”

Economists expect the labor market to continue in 2022, with employers clinging to existing workers “while remaining firmly in hiring mode,” wrote Lydia Boussour, chief economist at the U.S., and Kathy Bostjancic. chief economist at the United States, at Oxford Economics. report. “This will continue to put downward pressure on unemployment claims and is likely to reduce them further in the coming months,” they said.

The Federal Reserve on Wednesday launched a high-risk effort to control the worst inflation since the early 1980s. increasing your short-term benchmark interest rate and pointing to up to six additional rate hikes this year.

A quarter-point increase in the Fed’s key rate, which had been close to zero since last year pandemic recession two years ago, it marked the beginning of its efforts to curb high inflation following the recovery from the recession. Rate increases will eventually mean higher loan rates for many consumers and businesses.

Central bank policymakers expect inflation to remain high, ending at 4.3% in 2022, according to quarterly projections released on Wednesday.

Last week, the government reported that consumer inflation rose by 7.9% last year, the sharpest rise since 1982.