The number of new applications for unemployment benefits rose by 11,000 last week to 227,000 after a surprisingly good January jobs report.
Weekly jobless claims are seen as a proxy for layoffs and have been watched closely in recent weeks as the Federal Reserve gears up to hike interest rates.
The general trend of declining layoffs will help President Joe Biden, who has been plagued with low approval ratings and disapproval with how his administration has handled the country’s inflationary woes. It will also give the Federal Reserve’s campaign to raise interest rates increased credence.
Jobless claims have been in a steady retreat over the last year. Around this time in March 2021, new claims were averaging more than 700,000 per week. Even during this year’s surge in COVID-19 cases related to the omicron variant, jobless claims only increased slightly, showing resiliency in the country’s economic recovery.
Thursday’s numbers come after a better-than-anticipated jobs report last week. The economy again blew past expectations and added 678,000 jobs in February, an encouraging sign that the labor market is returning to its pre-pandemic strength.
The Fed is set to hike interest rates for the first time in years next week in order to fight the country’s explosive inflation. While the economy has largely improved from its trough during the worst of the pandemic, inflation has been mounting over the past year and is causing major pain for consumers.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
Consumer prices rose 7.5% in the 12 months ending in January, the fastest pace of inflation in four decades. The consensus among economists is that the February consumer price index report, which will be released on Thursday, will show inflation rose even more.
