Applications for US jobless benefits fall again as labor market powers on

A “Help Wanted” sign is displayed at a restaurant in Buffalo Grove, Ill., Thursday, Jan. 18, 2024. On Thursday, Feb. 22, 2024, the Labor Department reports on the number of people who applied for unemployment benefits last week. (AP Photo/Nam Y. Huh)

The number of Americans applying for jobless benefits fell to its lowest level in five weeks, even as more high-profile companies announce layoffs.

Applications for unemployment benefits fell by 12,000 to 201,000 for the week ending Feb. 17, the Labor Department reported Thursday.

The four-week average of claims, a less volatile measure, fell by 3,500 to 215,250, down from 218,750 the previous week.

Weekly unemployment claims are broadly viewed as representative of the number of U.S. layoffs in a given week. They have remained at historically low levels in recent years, despite efforts by the U.S. Federal Reserve to cool the economy.

The Federal Reserve raised its benchmark borrowing rate 11 times beginning in March of 2022 in an effort to bring down the four-decade high inflation that took hold after the economy roared back from the COVID-19 recession of 2020.

Many economists expected the rapid rate hikes to weaken the labor market and potentially tip the country into recession, but it hasn’t happened. Jobs have remained plentiful and the economy has held up better than forecast thanks to strong consumer spending.

U.S. employers delivered a stunning burst of hiring to begin 2024, adding 353,000 jobs in January in the latest sign of the economy’s continuing ability to shrug off the highest interest rates in two decades.

Last month’s job gain — roughly twice what economists had predicted — topped the December gain of 333,000, a figure that was revised sharply higher. The unemployment rate stayed at 3.7%, and has been below 4% for 24 straight months — two full years — the longest such streak since the 1960s.

Though layoffs remain at low levels, there has been an uptick in job cuts recently across technology and media. Google parent company Alphabet, eBay, TikTok, Snap and the Los Angeles Times have all recently announced layoffs. Last week, Cisco Systems announced it was cutting 4,000 jobs.

Outside of tech and media, UPS, Macy’s and Levi’s also recently cut jobs.

In total, 1.86 million Americans were collecting jobless benefits during the week that ended Feb. 10, a decrease of 27,000 from the previous week.

Though inflation has eased considerably in the past year, the Labor Department reported last week that consumer prices remain well above the Fed’s 2% target.

The Fed has left rates unchanged at its last four meetings.