The number of new applications for unemployment benefits rose by 19,000 last week to 200,000, a bit of a pop but still keeping to the trend of low weekly jobless claims.
The low level of weekly jobless claims, reported Thursday by the Department of Labor, indicates that layoffs are rare as employers are increasingly desperate to hold on to workers. Weekly claims have been headed downward since the omicron variant of COVID-19 peaked in mid-January.
New jobless claims have been in retreat over the past year. Around this time in May of last year, new claims were averaging more than 500,000 per week.
"With job openings and quits at a record high, employers will keep layoffs to a minimum. Even as the economy slows in response to high inflation and rising interest rates, we expect employers will be more likely to slow the pace of hiring than to let go of workers," economists with Oxford Economics said.
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The lowest number of recent jobless claims was the 166,000 in mid-March — the fewest number of new weekly claims since 1968.
The news comes a day after the Federal Reserve raised its interest rate target by half a percentage point in order to rein in inflation. The hike was more aggressive than usual and is akin to two typical rate hikes at once, something that hasn’t been done since 2000.
One factor that has given the Fed confidence to tighten its monetary policy has been the strong labor numbers. The economy added 431,000 jobs in March, and unemployment fell to pre-pandemic rates, showing that the labor market is quite hot. Labor participation was also up in March.
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Meanwhile, the economy has been mired in too-high inflation, with consumer prices increasing 8.5% for the 12 months ending in March.