Global Courant 2023-05-04 18:17:13
The number of Americans claiming unemployment benefits rose last week, but remains generally low, even as the Federal Reserve has furiously raised interest rates to contain inflation and cool the job market.
The Labor Department reported on Thursday that the number of jobless claims for the week ending April 29 was up 13,000 to 242,000, from 229,000 the week before. The weekly claims numbers are considered a proxy for layoffs.
The four-week moving average of claims, which smooths out some of the volatility from week to week, rose 3,500 to 239,250.
A total of 1.81 million people received unemployment benefits in the week ending April 22, about 38,000 fewer than the week before.
US workers enjoy unusual job security despite rising interest rates, economic uncertainty and fears of an impending recession.
As expected, in its ongoing inflation battle, the Fed raised its benchmark interest rate by another quarter point on Wednesday. One of the Fed’s goals in raising rates 10 times in the past 14 months is to cool the labor market and suppress rising wages. Until recently, there was little evidence that central bank actions had an effect on the labor market. But cracks can appear.
The unemployment rate came in at 3.5% last month, a tick above January’s half-century low of 3.4% in January. Employers added 236,000 jobs in March, up from 472,000 in January and 326,000 in February, but still strong by historical standards.
Another sign that the job market may be cooling came Tuesday when the government reported that the number of job openings in the US fell to its lowest level in nearly two years in March.
Analysts expect Friday’s April jobs report to show that U.S. employers added 180,000 jobs last month, a relatively low figure compared to the mostly booming job growth of recent years.
The Fed is hoping for a so-called soft landing: cutting growth just enough to control inflation without triggering a recession. Economists are skeptical and many expect the US to slip into recession later this year.
Last week, the US Department of Commerce reported that the US economy slowed sharply from January through March, slowing to just 1.1% year on year as higher interest rates hit the housing market and companies reduced inventories.
Layoffs have been on the rise in recent months, especially in the technology sector, where companies have been adding jobs at a breakneck pace during the pandemic. IBM, Microsoft, Salesforce, Twitter, Lyft and DoorDash have all announced layoffs in recent months. Amazon and Facebook have each cut two jobs since November.
But it’s not just the tech sector that’s cutting off staff. McDonald’s, Morgan Stanley and 3M also recently announced layoffs.
