Thursday’s weekly report on jobless claims showed that employers’ appetite for workers remains undiminished.
The number of people applying for unemployment benefits last week fell to 210,000, slightly lower than the previous week’s 212,000. By historical standards, this is a very low-level claim.
The number of new unemployment insurance claims since the beginning of the year has ranged from 194,000 to 225,000. This suggests that monetary policy, which the Fed has described as restrictive, is not weighing on the labor market.
Economists had expected the number of insurance claims to rise slightly to 213,000.
The number of people receiving unemployment benefits beyond the first week rose by 4,000 to 1.81 million, also low by historical standards.
Economists and Fed officials were surprised that inflation fell so quickly last year without a significant softening in the labor market. Layoffs are rare, employment growth is strong, and the unemployment rate remains below 4%.
However, progress in curbing inflation has stalled in recent months. Some analysts believe that supply chain repairs and productivity gains may have allowed inflation to fall last year without hurting the labor market, but that inflation remains within the Fed’s target of 2. %, and that a higher unemployment rate may be needed to maintain it.
The unemployment rate rose to 3.9% in February, 0.5 percentage points above the recent lows of 3.4% recorded in April and January last year. This is the lowest level since 1969 and slightly below the pre-pandemic low of 3.5% set in 2019 and early 2020.
