Fewer Americans filed for unemployment benefits last week, as layoffs remain at historically low levels even as there are other signs that the labor market is cooling.
The Labor Department reported Thursday that jobless claims for the week ending May 11 fell by 10,000 to 222,000, down from 232,000 the week before. Last week’s claims were the largest since the last week of August 2023, although the number of layoffs remains relatively low.
The four-week average claims, which adjusts for some week-to-week fluctuations, rose by 2,500 to 217,750.
Weekly unemployment claims are an indicator of the number of layoffs in the United States in a given week and a sign of the direction the labor market is headed. They have remained at historically low levels since millions of jobs were lost when the COVID-19 pandemic hit the United States in the spring of 2020.
In April, employers in the United States Only 175,000 jobs were addedThis is the lowest number in six months and a sign that the job market may finally be calming down. The unemployment rate rose again to 3.9% from 3.8%, and has now remained below 4% for 27 straight months, the longest such period since the 1960s.
As the government recently stated 8.5 million job opportunities In March, the lowest number of vacancies in three years.
A moderation in the pace of hiring, coupled with a slowdown in wage growth, could give the Fed the data it has been looking for in order to finally issue a rate cut. a A cooler read about consumer inflation April could also play a role in the Fed’s next interest rate decision.
The Fed raised its benchmark borrowing rate 11 times starting in March 2022 in an attempt to stifle four-decade-high inflation that took hold after the economy rebounded from the COVID-19 recession in 2020. The Fed’s intention was to ease labor market constraints and slow wage growth, which is What could fuel inflation?
Many economists believe there is a chance that rapid increases in interest rates could lead to a recession, but jobs are still plentiful and the economy remains broadly healthy thanks to strong consumer spending.
Although layoffs remain at low levels, companies have made announcements More job cuts recently, mostly through technology and media. Google’s parent company, Alphabet, apple eBay recently announced layoffs.
Away from technology and media. WalmartCompanies like Peloton, Stellantis, Nike, and Tesla recently announced job cuts.
In total, 1.79 million Americans were collecting unemployment benefits during the week ending May 4. This is 13,000 more than the previous week.
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