Saturday, April 13, 2024

Fewer Americans apply for jobless benefits as labor market keeps humming along

by BIZ Magazine

(AP) — Applications for unemployment benefits fell again last week as America’s labor market continues to hum along despite attempts by the Federal Reserve to cool the economy and bring down inflation that’s still higher than optimal.

The number of Americans applying for jobless benefits fell last week by 10,000, to 230,000 the week ending August 19, the Labor Department reported Thursday.

The four-week moving average of claims, a less volatile measure, rose by 2,250 to 236,750.

Jobless claim applications are seen as reflective of the number of layoffs in a given week.

In an attempt to bring down four-decade high inflation, the Federal Reserve raised interest rates 11 times in the past year-and-a-half to the current 5.4%, a 22-year high.

Part of the Fed’s reasoning was to cool the job market and bring down wages, which many economists believe suppresses price growth. Though inflation has come down significantly during that stretch, the job market has held up better than many anticipated.

Early this month, the government reported that U.S. employers added 187,000 jobs in July, fewer than expected, but still a reflection of a healthy labor market. The unemployment rate dipped to 3.5%, close to a half-century low.

Job openings in June fell a tick below 9.6 million, the fewest in more than two years. However, the numbers remain unusually robust considering monthly job openings never topped 8 million before 2021.

The government updates both of those reports next week.

Besides some layoffs in the technology sector early this year, companies have mostly been trying to retain workers.

However, in a filing with the Securities and Exchange Commission on Thursday, phone carrier T-Mobile said it was cutting its workforce by just less than 7%. That works out to about 5,000 jobs.

Many businesses struggled to replenish their workforces after cutting jobs during the pandemic, and sizable amount of the ongoing hiring likely reflects efforts by firms to catch up to elevated levels of consumer demand that emerged since the pandemic recession.

While the manufacturing, warehousing, and retail industries have slowed their hiring in recent months, they aren’t yet cutting jobs in large numbers. Given the difficulties in finding workers during the past two years, businesses will likely hold onto them as long as possible, even if the economy weakens.

Overall, 1.7 million people were collecting unemployment benefits the week that ended August 12, about 9,000 fewer than the previous week.

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