The number of Americans looking for unemployment benefits fell last week to its lowest point since March. This signifies a majority of U.S. workers are experiencing a remarkable level of job security.
According to the report of the Labor Department on Thursday, jobless claims have decreased by 9,000 bringing the total to 211,000. The four-week average also saw a decline of 3,500, settling at 223,250.
In addition to this, the total number of individuals getting unemployment benefits was lowered by 52,000 to 1.84 million marking the lowest figure since September.
Economists Thomas Simons and Sam Saliba from Jefferies described these declines as ‘encouraging’ in their analysis. However, they did warn that the data could be misinterpreted because of the seasonal adjustments during the holiday season.
The U.S. job market has majorly got better from the hiring rates in 2021-2023 which was a time when the economy was still in the rebounding phase from the COVID-19 pandemic.
Employers added an average of 180,000 jobs per month in 2024 as of November. In 2023, it was a decrease from 251,000, 377,000 in 2022, and a record 604,000 in 2021.
Nevertheless, this slower pace of job creation still affects a strong economy, showing resilience despite high interest rates. When the hiring figures for December were released by the Labor Department on the 10th of January, it was expected that the employers added around 160,000 jobs last month.
Weekly jobless claims serve as an indicator of layoffs which have stayed below pre-pandemic levels. An increase from 3.4% in 2023 to 4.2% was seen in the employment rates as of now. Benchmark interest rates were increased 11 times in 2022 and 2023 by the Federal Reserve in an effort to fight inflation. In 2024, the Fed lowered its target interest rate for the third time during its December meeting.
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