The number of Americans filing for unemployment benefits fell last week as layoffs remained historically low despite the Federal Reserve's efforts to ease the labor market.
Jobless claims for the week ending May 18 fell by 8,000 to 215,000, compared with 223,000 the week before, the Labor Department reported Thursday.
The four-week average of claims, which smooths out some of the weekly volatility, rose a modest 1,750 to 219,750.
Weekly unemployment claims are considered a measure of the number of layoffs in the U.S. in a given week and a sign of where the labor market is headed. They have remained at historically low levels since millions of jobs were lost when the COVID-19 pandemic hit the US in spring 2020.
The Federal Reserve raised interest rates 11 times starting in March 2022 in an effort to quell four-decade high inflation that took hold after the economy recovered from the 2020 COVID-19 recession. The Fed's intention was to to relax the labor market. market and cool wage growth, which could fuel inflation.
Many economists thought there was a chance that the rapid rate hikes could trigger a recession, but plenty of jobs remain and the economy is still healthy overall thanks to strong consumer spending.
In April, U.S. employers added just 175,000 jobs, the fewest in six months, a sign that the labor market is finally cooling. The unemployment rate rose from 3.8% to 3.9% and has now remained below 4% for 27 months in a row, the longest streak since the 1960s.
The government also recently reported 8.5 million vacancies in March, the lowest number of vacancies in three years.
A moderation in the pace of hiring, along with a slowdown in wage growth, could give the Fed the data it has been looking for to finally cut rates. A cooler view of consumer inflation in April could also play a role in the Fed's next interest rate decision.
While layoffs remain at low levels, companies have recently announced more job cuts, especially in the technology and media sectors. Google parent company Alphabet, Apple and eBay have all recently announced layoffs.
Outside of tech and media, Walmart, Peloton, Stellantis, Nike and Tesla recently announced job cuts.
A total of 1.79 million Americans received unemployment benefits in the week ending May 11. That is an increase of 8,000 compared to the previous week and 84,000 more than in the same period a year ago.
