The strong data on the United States labor market comes even as layoffs in the technology sector increased.
US applications for jobless aid fell again last week to their lowest level since April, further evidence that the job market is resisting the Federal Reserve’s aggressive rate hikes as it tries to cool in the economy and lowering inflation.
Applications for unemployment benefits in the United States for the week ended January 28 fell by 3,000 last week to 183,000, from 186,000 the previous week, the US Department of Labor reported Thursday. It was the third straight week that claims were below 200,000 and the third straight week of decline.
Jobless claims generally serve as a proxy for layoffs, which have been relatively low since the coronavirus pandemic eliminated millions of jobs in the spring of 2020.
The four-week moving average of claims, which flattened some week-to-week volatility, fell 5,750 to 191,750.
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 now in the range of 4.5 percent to 4.75 percent, the highest level in 15 years. Fed Chair Jerome Powell appeared to suggest on Wednesday that he sees two more quarter-point rate hikes.
So far, the Fed’s aggressive policy has pushed up inflation, but has had little effect on a strong US job market.
On Wednesday, the government reported that US job openings rose 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 openings — a level not reached before 2021 in Labor Department data. in 2000. The number of openings in December means there are about two vacancies for every unemployed American.
Last month’s jobs report told a similar story: U.S. employers added a solid 223,000 jobs in December, pushing the unemployment rate to 3.5 percent, equivalent to a 53 years low.
The Labor Department released its monthly jobs report for January on Friday, and analysts expect the US economy to add another 185,000 jobs. That’s the lowest number in more than two years.
Within the monthly employment data, there was some evidence of slowing wage growth, one of the Fed’s goals. Average hourly wage growth in December fell to the slowest pace in 16 months, easing pressure on employers to raise prices to offset their higher labor costs.
Although the US labor market remains strong, layoffs in the technology sector, which is facing a drop in demand after a pandemic boom. IBM, Microsoft, Amazon, Salesforce, Facebook parent Meta, Twitter and DoorDash have all announced layoffs recently.
The Fed’s interest rate hikes have hit the real estate sector the hardest, largely because of higher mortgage rates — now above 6 percent — that have slowed home sales for 11 consecutive months. That’s almost in step with the Fed’s rate hikes that began in March.
About 1.66 million people received unemployment benefits in the week ending Jan. 21, down 11,000 from the previous week.