US applications for unemployment benefits fell to their lowest level in eight months last week as the labor market remains strong despite higher interest rates.
U.S. applications for jobless claims fell by 20,000 to 201,000 in the week ending Sept. 16, the Labor Department reported Thursday. This is the lowest figure after the last week of January.
Jobless claims applications are viewed as a proxy for the number of layoffs in a given week.
The four-week moving average of claims, a less volatile measure, fell 7,750 to 217,000.
Although the Federal Reserve this week opted to leave its benchmark lending rate alone, it is now in the second year of its fight to tame four-decade high inflation. A massive 11 interest rate hikes since March last year have helped curb price rises, but the US economy and labor market have been better than expected.
Earlier this month, the government reported that US employers added 187,000 jobs in August. Although the unemployment rate has reached 3.8%, it is still low by historical measurements.
U.S. businesses are adding an average of about 236,000 jobs per month this year, down from the pandemic growth of the past two years, but still a strong number.
Recent government data also showed that job openings declined to 8.8 million in July, the lowest since March 2021 and down from 9.2 million in June. However, this number remains unusually strong, given that monthly job openings never topped 8 million before 2021.
Apart from a few layoffs earlier this year – mostly in the technology sector – companies have been trying to retain their employees.
Many businesses struggled to replenish their workforce after cutting jobs during the pandemic, and a large amount of the ongoing hiring reflects companies’ efforts to capture the elevated levels of consumer demand that emerged after the pandemic recession. .
Overall, 1.66 million people were receiving unemployment benefits in the week ending September 9, about 21,000 fewer than the previous week.
Matt Ott, The Associated Press