The number of Americans filing new claims for unemployment benefits edged higher last week but remain in a range indicating the U.S. job market remains tight, even as the Federal Reserve works to cool demand for labour as part of its bid to lower inflation.
The claims figures have been choppy in recent weeks but have held well below the 270,000 threshold that economists see as a red flag for the labour market. A raft of layoffs in the technology sector and interest-rate sensitive industries like housing have yet to leave a notable imprint on claims as laid-off workers appear to cycle into new jobs with relative ease.
Indeed, the labour market’s resilience is a central focus for Fed policy-makers, as the U.S. economy has minted an average of 392,000 new jobs a month this year despite rapid rate hikes and growing fears of a recession next year.
Economists believe that companies are likely to cut back on hiring before embarking on layoffs. Employers have been generally reluctant to lay off workers after struggling to find labour during the COVID-19 pandemic.