More Americans filed for jobless benefits last week, but layoffs remain historically low despite attempts by the Federal Reserve to cool the economy, and hiring, to bring down inflation.
Applications for jobless aid in the U.S. for the week ending Feb. 4 rose by 13,000 last week to 196,000, from 183,000 the previous week, the Labor Department reported Thursday. It’s the fourth straight week claims were under 200,000.
Jobless claims generally serve as a proxy for layoffs, which have been relatively low since the pandemic wiped out millions of jobs in the spring of 2020.
The four-week moving average of claims, which flattens out some of the week-to-week volatility, fell by 2,500 to 189,250. It’s the third straight week that the four-week moving average has been below 200,000 and the ninth straight weekly decline.
Last week, the Fed raised its main lending rate by 25 basis points, its 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. Chair Jerome Powell appeared to suggest that he foresees two additional quarter-point rate hikes.
So far, the Fed’s aggressive policy has pushed inflation down, but has had less impact on a resilient U.S. job market.
Last Friday, the government reported that employers added a sizzling 517,000 jobs in January and that the unemployment rate dipped to 3.4%, the lowest level since 1969. Analysts were expecting job gains of around 185,000.
Last month’s job gains were so large it confounded economists, who struggled to explain why the Fed’s aggressive interest rate hikes haven’t slowed hiring at a time when many foresee a recession nearing.