So much for the idea that January’s surge in employment was an anomaly in a cooling labor market.
The number of people who applied for unemployment benefits for the first time in mid-February was 201,000, down from 213,000 the previous week.
Economists had expected a slight increase to 216,000.
Filing for unemployment insurance is a substitute for layoffs. Despite headlines about layoffs at technology and entertainment companies, the number of applications hasn’t increased significantly this year. The latest number of applications is the lowest in five weeks. The number of new insurance claims peaked at 227,000 at the end of January, but has been declining for three consecutive weeks.
Claims are now lower than at any point last year, with the exception of one week in mid-October, when claims fell to 200,000.
The number of people who received unemployment benefits after the first week fell by 27,000 to 1.86 million. This is consistent with historically normal levels, including in the years before the pandemic, and suggests that workers who lose their jobs are quickly finding new ones. In the long term, 1.86 million people is lower than normal.
The unemployment rate was 3.7% in January, and the economy added 353,000 jobs. Employers had 9 million job openings at the beginning of the year.
The low unemployment rate, high number of job openings, and low number of layoffs are expected to continue supporting strong consumer spending. This will make it harder for the Federal Reserve to rein in inflation and put upward pressure on interest rates. U.S. Treasury yields rose Thursday morning after insurance claims statistics were released.
