The data on the job market in the United States comes despite the fact that the shortage of tech jobs has increased.
US jobless claims fell again last week to the lowest level since April, further evidence that the labor market has struggled with aggressive hikes by the Federal Reserve as it tries to cool the economy and lower inflation.
Applications for unemployment benefits in the United States for the week ended January 28 fell by 3,000 in the previous week to 183,000, from 186,000 in the previous week, the US Department of Labor said on Thursday. It was the third straight week that claims were under 200,000 and the third week in a row.
Jobless claims are often used as a way to support the unemployment rate, which has been at an all-time low since the coronavirus pandemic wiped out millions of jobs in late 2020.
The four-week volume of claims, which reduces week-to-week volatility, fell by 5,750 to 191,750.
The Fed on Wednesday raised its key interest rate by 25 basis points, its eighth hike in less than a year. The central bank’s interest rate has now reached 4.5 percent to 4.75 percent, its highest level in 15 years. Fed Chairman Jerome Powell appeared to indicate on Wednesday that he foresees additional quarterly hikes.
So far, the Fed’s hawkish policy has slowed inflation, but has had little impact on the stable US labor market.
On Wednesday, the government reported that US job openings rose to 11 million in December, up from 10.44 million in November and the highest since July. For 18 straight months, employers have posted at least 10 million job openings – a level that has not been reached in 2021 in the Labor Department’s data since 2000. The number of openings in December meant that there were almost two 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 to 3.5 percent, matching a 53-year low.
The Labor Department releases its monthly report for January on Friday, and analysts expect the US economy to add another 185,000 jobs. That would be the lowest number in more than two years.
Within the monthly employment data, there is some evidence of a slowdown in wage growth, one of the Fed’s targets. Average hourly growth in December was the slowest in 16 months, which could ease pressure on employers to raise prices to offset rising labor costs.
Although the US labor market remains strong, layoffs have been increasing in the tech sector, which is facing lower demand after the spread of the pandemic. IBM, Microsoft, Amazon, Salesforce, Facebook parent Meta, Twitter and DoorDash have all announced layoffs recently.
The Fed’s interest rate hikes have had a major impact on the real estate market, largely because of the high interest rates — currently above 6 percent — that have slowed home sales for 11 straight months. This is on the heels of 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 previous week.