The number of new applications for unemployment benefits rose by 14,000 last week to 202,000, still a historically low number that indicates that employers are desperate to hold on to workers.
Jobless claims had fallen to the lowest level in decades the previous week. Weekly jobless claims are seen as a proxy for layoffs and have been watched closely as the Federal Reserve hiked its interest rate target.
The general trend of declining layoffs is a good economic sign for President Joe Biden, who has faced low approval ratings and displeasure with how his administration has handled the country’s explosive inflation.
“That is still a low level of claims consistent with extremely tight labor market conditions. We expect initial claims to remain around 200k or lower as employers, who continue to struggle to attract and retain workers, are likely to keep layoffs to a minimum,” economists with Oxford Economics said.
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It also gives the Federal Reserve, which just raised interest rates for the first time in years, increased confidence in its plans to tighten monetary policy and jack up interest rates.
New jobless claims have been in retreat over the past year. Around this time in March of last year, new claims were averaging more than 700,000 per week. Even during this year’s COVID-19 surge with the omicron variant, jobless claims only ticked up slightly, showing strength in the economic recovery.
After good numbers in January, the economy once more exceeded expectations and notched an increase of 678,000 jobs in February. The unemployment rate also ticked down to 3.8%, nearing its ultralow pre-pandemic levels.
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Still, the country has been shackled with historic inflation. Consumer prices rose 7.9% for the 12 months ending in February, the fastest rate of increase since 1982.
