The number of people applying for jobless benefits in the U.S. inched up last week, the fourth consecutive week in which new claims have come in below 200,000.
The Labor Department said initial claims for state unemployment benefits rose to 196,000 in the week ended February 4th. Economists had expected 190,000, so the number was an upside surprise.
The previous week’s figure was unrevised at 183,000, the lowest level of new claims since April of 2022.
Claims can be volatile from week to week, so many economists prefer to look at the four-week moving average of claims. This fell by 2,500 to 189,250, the lowest level since May of 2022.
Continuing claims, those made after the initial application for benefits, are reported with a one week delay. For the week ended January 28, these rose by 38,000 to 1,688,000. The previous week’s level was revised down by 5,000 from 1,655,000 to 1,650,000. The 4-week moving average rose by 14,5000 to 1,664,750.
The labor market continues to signal that employers have a voracious appetite for workers despite a slowdown in the housing and manufacturing sectors. Last week, the Labor Department said there were 11 million job vacancies at the end of December, an unexpected increase in openings. Employers added 517,000 workers to payrolls in January and unemployment fell to 3.4 percent, the lowest since 1969. This brought the ratio of vacancies to unemployed people to 1.9 to one, near the record high hit last year.
Fed chairman Jerome Powell has described the labor market as extremely tight and unbalanced. In the central bank’s view, the imbalance between labor supply and demand risks exacerbating inflationary pressures, unanchoring inflation expectations and creating a wage-price spiral that would make it harder to bring inflation back down to the Fed’s target of two percent.
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