US applications for unemployment benefits fall again

The number of Americans filing for jobless claims fell last week despite more layoff announcements from high-profile companies recently.

Applications for unemployment benefits fell by 9,000 to 218,000 for the week ending February 3, the Labor Department reported yesterday.

The four-week average of claims, which evens out some of the weekly volatility, increased by 3,750 to 212,250.

Weekly unemployment claims are seen as a proxy for the number of United States layoffs in a given week. They have remained at extraordinarily low levels despite efforts by the US Federal Reserve to cool the economy.

The Federal Reserve raised its benchmark rate 11 times beginning in March of 2022 in an effort to bring down the four-decade high inflation that took hold after an unusually strong economic rebound from the COVID-19 recession of 2020.

Though inflation has eased considerably in the past year, the Labor Department reported recently that overall prices rose 0.3 per cent from November to December and were up 3.4 per cent from 12 months earlier, a sign that the Fed’s drive to slow inflation to its two per cent target will likely remain a bumpy one.

The Fed has left rates unchanged at its last four meetings.

As the Fed rapidly jacked up rates in 2022, most analysts predicted that the US economy would tip into recession. But the economy and the job market remained surprisingly resilient.

US employers delivered a stunning burst of hiring to begin 2024, adding 353,000 jobs in January in the latest sign of the economy’s continuing ability to shrug off the highest interest rates in two decades.

Last month’s job gain – roughly twice what economists had predicted – topped the December gain of 333,000, a figure that was revised sharply higher. The unemployment rate stayed at 3.7 per cent, and has been below four per cent for 24 straight months – two full years – the longest such streak since the 1960s.

Though layoffs remain at low levels, there has been an uptick in job cuts recently across technology and media. Google parent company Alphabet, eBay, TikTok and the Los Angeles Times have all recently announced layoffs. Just this week, Snap, which owns the social media app Snapchat, announced it was cutting 10 per cent of its workforce.

Outside of tech and media, UPS, Macy’s and Levi’s also recently cut jobs.

In total, 1.87 million Americans were collecting jobless benefits during the week that ended January 27, a decrease of 23,000 from the previous week.

AP