US jobless claims lowest since April | Business and economic news

The robust data on the United States labor market comes even as layoffs in the technology sector have increased.

US jobless claims fell again last week to their lowest level since April, further evidence that the labor market has withstood aggressive rate hikes by the Federal Reserve as it tries to cool the economy and reduce inflation.

The number of claims for unemployment benefits in the United States for the week ended Jan. 28 fell by 3,000 last week to 183,000, from 186,000 the previous week, the US Labor Department reported on Thursday. It was the third straight week that claims were below 200,000 and the third straight weekly decline.

Jobless claims generally serve as a proxy for layoffs, which have been relatively low since the coronavirus pandemic wiped out millions of jobs in the spring of 2020.

The four-week moving average of claims, which smooths out some of the week-to-week volatility, fell 5,750 to 191,750.

The Fed raised its key interest rate by 25 basis points on Wednesday, the eighth rate hike in less than a year. The central bank’s benchmark rate is now in the range of 4.5 to 4.75 percent, the highest level in 15 years. Fed Chairman Jerome Powell appeared to suggest on Wednesday that he foresees two additional quarter-point interest rate hikes.

So far, the Fed’s aggressive policy has reduced inflation, but has had less of an impact on a resilient US labor market.

On Wednesday, the government reported that the number of US job openings rose to 11 million in December, up from 10.44 million in November and the most since July. Employers have posted at least 10 million job openings for 18 consecutive months — a level not reached before 2021, according to Labor Department data going back to 2000. The number of job openings in December meant there were about two job openings for every unemployed American.

Last month’s jobs report told a similar story: US employers added a solid 223,000 jobs in December, pushing the unemployment rate down to 3.5 percent, the lowest level in 53 years.

The Labor Department releases its monthly employment 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.

Inside the monthly jobs data, there was some evidence of a slowdown in wage growth, another of the Fed’s targets. Growth in average hourly wages slowed to the slowest pace in 16 months in December, which could reduce 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 a drop in demand following the expansion of the pandemic. IBM, Microsoft, Amazon, Salesforce, Facebook parent Meta, Twitter and DoorDash have all recently announced layoffs.

The Fed’s rate hikes have hit the real estate sector the hardest, largely because higher mortgage rates — currently above 6 percent — have slowed home sales for 11 consecutive months. That’s almost in step with the Fed’s rate hikes that began last March.

About 1.66 million people received unemployment benefits in the week ended Jan. 21, down 11,000 from the week before.

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