Strong data on the US jobs market comes in even as layoffs in the tech sector have increased.
U.S. jobless claims fell again last week to their lowest level since April, adding evidence that the job market has withstood aggressive rate hikes by the Federal Reserve. Federal when it tries to cool down the economy and reduce inflation.
The number of jobless claims in the United States for the week ended January 28 fell 3,000 last week to 183,000 from 186,000 the week before, the US Labor Department reported on Thursday. This is the third consecutive week of claims below 200,000 and the third consecutive week of declines.
Claims for unemployment benefits often act as a proxy for layoffs, which are relatively low since the coronavirus pandemic wiped out millions of jobs in the spring of 2020.
The four-week moving average of claims, which eliminates some of the weekly volatility, fell 5,750 to 191,750.
The The Fed on Wednesday raised its key lending rate by 25 basis points, the eighth rate hike in less than a year. The central bank’s benchmark rate is currently between 4.5% and 4.75%, a 15-year high. Fed Chairman Jerome Powell appeared to hint Wednesday that he anticipates two more rate hikes by a quarter point.
So far, aggressive Fed policy has pushed inflation down, but with less impact on the US decent job market.
On Wednesday, the government reported that Job opportunities in the US increased to 11 million in December, up from 10.44 million in November and the highest since July. For 18 consecutive months, employers have posted at least 10 million job vacancies – a level never before reached. 2021 in Labor Department data from 2000. The number of vacancies in December means there are about two vacancies for every unemployed American.
Last month’s jobs report told a similar story: US employers added 223,000 jobs in December, push the unemployment rate down to 3.5 percentmatched a 53-year low.
The Labor Department releases its monthly jobs report for January on Friday, and analysts expect the US economy to add 185,000 jobs. That would be the lowest number in more than two years.
In the monthly jobs data, there was some evidence of slowing wage growth, another Fed target. Average hourly wage growth in December slowed to its slowest pace in 16 months, which could ease pressure on employers to raise prices to offset their higher labor costs. .
Although the US labor market remains strong, layoffs are increasing in the technology sector, which is dealing with falling demand in the wake of the pandemic. IBM, Microsoft, Amazon, Salesforce, the parent company of Facebook, Meta, Twitter and DoorDash have all announced layoffs recently.
The Fed’s rate hike has hit the real estate sector the hardest, largely because higher mortgage rates – now above 6% – have slowed home sales for the 11th straight month. That’s pretty much the next step with the Fed rate hikes that began last March.
About 1.66 million people were receiving unemployment benefits in the week ending January 21, down 11,000 from the previous week.
