Unemployment Claims Slip Under 200,000 for Fifth Consecutive Week
The number of Americans requesting unemployment benefits decreased last week, marking the sixth week in a row that there were fewer than 200,000 new applications.
Initial claims for state unemployment benefits decreased by 1,000 to 194,000 in the week ending February 4th, according to the Labor Department. Economic experts had predicted that claims would increase to 200,000.
The estimate for the previous week was reduced by 1,000 to 195,000.
As claims, a proxy for layoffs, are prone to volatility, economists frequently use the four-week average to identify the fundamental trend. This increased to 189,500, a low number. The previous moving average was decreased by 25,000 to 189,000.
A one-week delay is used when reporting ongoing claims. The number increased by 16,000 to 1,696,000. The number of continuing claims for the prior week was decreased by 8,000. The continuing claims’ four-week moving average increased by 10,250 from the prior week to 1,673,000.
Notwithstanding a downturn in the housing and manufacturing sectors, the job market shows that companies still have a huge desire for workers. The Labor Department reported last week that there were 11 million unfilled positions at the end of December, an unexpected rise in listings. In January, employers hired 517,000 employees to their payrolls, and the unemployment rate dropped to 3.4 percent, the lowest level since 1969. This increased the vacancy-to-unemployed person ratio to 1.9 to 1, which is close to the record level reached last year.
The Federal Reserve’s attempts to control inflation are being thwarted by the labor market’s resilience. In order to lower inflation to the Federal Reserve’s target of two percent, Chairman Jerome Powell has made it clear that he thinks a softer labor market, with a better balance between the demand for and supply of labor, is required.
The Labor Department reported in a separate report on Thursday that its producer price index increased by 0.7% in January, an unexpectedly sharp acceleration of inflation following a modest dip in December. The Commerce Department reported on Wednesday that retail sales increased significantly in January, indicating a rise in consumer demand.