Applications for jobless benefits decline last week
Published 5:36 pm Friday, December 2, 2022
WASHINGTON — The number of Americans applying for unemployment benefits came back down last week, hovering near levels suggesting the U.S. labor market has been largely unaffected by the Federal Reserve’s aggressive interest rate hikes.
Applications for jobless aid fell to 225,000 for the week ending Nov. 26, a decline of 16,000 from the previous week’s 241,000, the Labor Department reported Thursday. The four-week moving average of claims, which evens out week-to-week swings, inched up by 1,750 to 227,000.
Applications for unemployment benefits are a proxy for layoffs, and viewed with other employment data, shows that American workers are enjoying extraordinary job security at the moment, despite an economy with some glaring weaknesses.
To combat inflation that hit four-decade highs earlier this year, the Federal Reserve has raised its benchmark interest rate six times since March. The housing market has buckled under the strain of mortgage rates that have more than doubled from a year ago. Many economists expect the United States to slip into a recession next year with more Fed rate hikes expected to increase borrowing costs and slow economic activity.
Early this month, the Fed raised its short-term lending rate by another 0.75 percentage points, three times its usual margin, for a fourth time this year. Its key rate now stands in a range of 3.75% to 4%, the highest in 15 years.
On Wednesday, Fed Chair Jerome Powell said the central bank would push interest rates higher than previously expected and keep them there for an extended period until inflation was under control. Powell did add that the size and pace of those increases could be scaled back from the jumbo three-quarters of a point increases the Fed made at its last four meetings.
In spite of persistent inflation and rapidly rising interest rates, U.S. employers added 261,000 jobs last month and are creating an average of nearly 407,000 a month this year. That pace would make 2022 the second-best year for hiring — after 2021 — in government records going back to 1940. There are nearly two job openings for every unemployed American. The unemployment rate is 3.7%, a couple of ticks above a half-century low.
The government issues its November jobs report on Friday.
New weekly applications for unemployment benefits have been extremely low early this year — staying below 200,000 for much of February, March and April. They began to tick up in late spring and hit 261,000 in mid-July before trending lower again.
The Labor Department said Thursday that 1.61 million people were receiving jobless aid the week that ended Nov. 19, up 57,000 from the week before.
The tech and real estate sectors have been outliers in an otherwise robust employment market, with Facebook, Twitter, Amazon, DoorDash, Redfin and Compass all announcing significant layoffs in recent months.