Fewer Americans have filed for unemployment benefits in the past week as layoffs remain at historically low levels, even as other signs have emerged that the job market is cooling.
Jobless claims for the week ending May 11 fell by 10,000 to 222,000, compared with 232,000 the week before, the Labor Department reported Thursday. Last week's job applications were the highest since the last week of August 2023, although still a relatively low number of layoffs.
The four-week average of claims, which offsets some of the week-to-week fluctuations, rose by 2,500 to 217,750.
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 going. They have remained at historically low levels since millions of jobs were lost when the COVID-19 pandemic hit the US in spring 2020.
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.
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.
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 4. That is 13,000 more than the week before.
