WASHINGTON — The number of Americans filing for unemployment benefits fell slightly last week, another sign that the labor market remains strong and most workers enjoy exceptional job security.
The Ministry of Labor reported on Thursday that the number of applications for unemployment benefits fell by 2,000 to 210,000. The four-week average of claims, which smooths out the ups and downs from week to week, rose by 2,500 to 211,250.
A total of 1.8 million Americans received unemployment benefits in the week ending March 9, a modest increase of 4,000 from the previous week.
Claims for unemployment benefits are seen as an indication of layoffs and as a sign of the direction the labor market is heading. Despite high-profile job cuts at tech companies such as Google parent Alphabet, eBay and Cisco Systems, layoffs overall remain below pre-pandemic levels. The unemployment rate, which stood at 3.9% in February, has been below 4% for 25 months in a row, the longest streak since the 1960s.
The economy and labor market have proven resilient, supported by consumer spending, even as the Federal Reserve has raised interest rates 11 times in 2022 and 2023 in an effort to combat inflation that flared up in 2021. Inflation has fallen from a four-decade period. high from 9.1% in June 2022 to 3.2% in February – but remains above the central bank’s 2% target.
Hiring has slowed from the breakneck pace of three years ago but remains strong, with employers adding a record 604,000 jobs per month in 2021, 377,000 in 2022 and 251,000 last year. In February, job creation unexpectedly rose to 275,000.
“Overall, layoffs remain at low levels,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “We expect job growth to slow somewhat, but unemployment to remain low this year.”
The combination of declining inflation and a strong economy has raised hopes that the Fed can engineer a so-called soft landing and curb price increases without plunging the economy into recession. On Wednesday, the Fed said it still expects to make three policy cuts and interest rate cuts this year – a sign of confidence in the progress being made in the fight against inflation.
