So much for the idea that January’s burst of hiring was an anomaly in an otherwise cooling labor market.
The number of people filing first-time claims for unemployment benefits fell in mid-February to 201,000, down from 213,000 in the prior week.
Economists had forecast a small increase to 216,000.
Jobless claims are a proxy for layoffs. Despite headlines about layoffs at technology and entertainment companies, claims have not risen significantly this year. The latest claims numbers are the lowest in five weeks. New claims peaked at 227,000 at the end of January and have been falling for three straight weeks.
Claims are now lower than they were at any point last year except for one week in mid-October, when they fell to 200,000.
The number of people collecting unemployment benefits after their initial week declined by 27,000 to 1.86 million. That’s consistent with historically normal levels, including in the years prior to the pandemic, suggesting that workers are quickly finding new work when they lose their jobs. From a longer-term perspective, 1.86 million is lower than usual.
The unemployment rate was 3.7 percent in January and the economy added 353,000 jobs. Employers had nine million open jobs as the year began.
Low unemployment, a high level of job vacancies, and low layoff numbers are likely to continue to support robust consumer spending. This makes it harder for the Federal Reserve to contain inflation and puts upward pressure on interest rates. Yields on U.S. Treasuries moved higher on Thursday morning after the claims data were released.
