Another indication that the job market is strong and most workers have excellent job security is the modest decline in the number of Americans applying for unemployment benefits last week.
A decrease of 2,000 to 210,000 people were declared unemployed on Thursday by the Labor Department. Claims increased by 2,500 to 211,250 on a four-week average, which accounts for fluctuations from week to week.
For the week ending March 9, the total number of Americans getting unemployment benefits was 1.8 million, an increase of 4,000 over the previous week.
Layoffs are still lower than before the epidemic, even if some high-profile tech businesses such as Alphabet (the parent company of Google), eBay, and Cisco Systems have eliminated jobs. The 25-month stretch of the unemployment rate being below 4% began in the 1960s and has continued with February’s reading of 3.9%.
Despite eleven interest rate hikes by the Federal Reserve in 2022 and 2023 to counter inflation that erupted in 2021, the economy and employment market have shown remarkable resilience bolstered by consumer spending. From a four-decade peak of 9.1% in June 2022 to 3.2% in February, inflation has declined, although it is still above the central bank’s objective of 2%.
Although the hiring rate has decreased from its astronomical peak three years ago, it is still high: In 2021, employers created 604,000 jobs per month; in 2022, 377,000 jobs per month; and last year, 251,000 jobs per month. A surprising 275,000 new jobs were created in February.
Rubeela Farooqi, chief U.S. economist at High Frequency Economics, stated that overall, layoffs remain at low levels and that the unemployment rate is expected to stay low this year, although job growth will slow down a bit.
There is optimism that the Federal Reserve may prevent a recession by achieving a “soft landing” and limiting price rises, thanks to declining inflation and a robust economy. The Federal Reserve showed its confidence in the fight against inflation by signaling on Wednesday that it still plans to lower rates three times this year, reversing policy.
