United States: Unemployment claims fall

Fewer Americans applied for unemployment benefits last week despite efforts by the Federal Reserve to ease the labor market with higher interest rates in a bid to cool the economy.

U.S. jobless claims for the week ending Feb. 11 fell by 1,000 last week to 194,000 from 195,000 the previous week, the Labor Department reported Thursday. This is the fifth week in a row that requests have been below 200,000.

Unemployment insurance claims are often synonymous with layoffs in the United States.

The four-week moving average of claims, which partly erases weekly volatility, rose by 500 to 189,500. This is the fourth week in a row that the four-week moving average has been below 200,000.

Earlier this month, the Fed raised its prime rate by 25 basis points, the eighth rate hike in less than a year. The central bank’s benchmark rate is now in a range of 4.5% to 4.75%, its highest level in 15 years. Central bank chairman Jerome Powell appeared to suggest he was considering two more quarter-point rate hikes.

So far, the Fed’s aggressive interest rate policy has moderated inflation, but had less impact on the resilience of the US labor market.

Two weeks ago, the government announced that employers had created 517,000 jobs in January – a better than expected result – and that the unemployment rate had fallen to 3.4%, the lowest level since 1969. analysts expected the creation of about 185,000 jobs.

Job vacancies reached 11 million in December, up from 10.44 million in November and the highest level since July. For 18 straight months, employers have posted at least 10 million job openings — a level not seen before 2021 in Labor Department data dating back to 2000. In December, there were about two job openings for every unemployed American .

Although the US labor market remains strong, layoffs have increased in the tech sector, where many companies have overhired after the pandemic boom. IBM, Microsoft, Amazon, Salesforce, Facebook’s parent company Meta, Twitter and DoorDash have announced layoffs in recent months.