The number of new applications for unemployment benefits slightly rose to 205,000 last week, the Labor Department reported Thursday.
Low jobless claims are a sign the labor market is remaining resilient despite the Federal Reserve’s historic effort to tighten monetary policy to slow economywide spending and drive down inflation.
The weekly jobless claims number has been closely watched over the past year or so, given the Fed’s aggressive pace of rate hikes. The report comes after the central bank raised rates by half of a percentage point in December and is likely to increase the rate again at the end of this month.
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For a stretch in the late summer, jobless claims defied expectations and remained low — even despite the Fed’s aggressive rate hikes. Since the start of October, though, they have been above 200,000.
While the number of new jobless claims has remained low enough to avert fear that the country is already in the throes of a recession, most economists anticipate that the U.S. economy will enter a Fed-induced recession at some point in the new year. That is because rate hikes can take a while to filter through the broader economy and create recessionary conditions and job losses.
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It is expected that as the rate hikes begin to ripple across the economy, jobless claims begin to tick up, and then monthly jobs reports will begin to turn negative.
