US jobless claims remain at newly healthy levels, falling to 227,000 last week
WASHINGTON (AP) — The number of Americans filing for unemployment benefits fell last week and has remained within a historically healthy range for the past few years.
Jobless claims for the week ending February 7 fell by 5,000 to 227,000 compared to the previous week, the Labor Department reported Thursday. That’s basically in line with the 226,000 new apps expected by analysts polled by data firm FactSet.
Unemployment claims are viewed as a proxy for layoffs in the United States and are close to a real-time indicator of the health of the labor market.
On Wednesday, the government reported that U.S. employers added a surprisingly strong 130,000 jobs in January and the unemployment rate fell to a still-low 4.3% from 4.4%. However, government revisions have reduced US payrolls for 2024-2025 by hundreds of thousands. This reduced the number of jobs created last year to just 181,000, a third of the previously announced figure of 584,000 and the weakest since the pandemic year of 2020.
While weekly layoffs have remained in the historically low range of mostly between 200,000 and 250,000 over the past few years, a number of high-profile companies have recently announced job cuts, including UPS, Amazon, Dow, and the Washington Post in recent weeks.
Increased layoff announcements last year, coupled with sluggish government reports on the labor market, have made Americans increasingly pessimistic about the economy.
The Labor Department also recently reported that job openings fell in December to their lowest level in more than five years, another sign that the US labor market remains stagnant, even though the economy is recording strong growth.
Data over the past year have broadly revealed a labor market in which hiring has clearly slowed, weighed down by uncertainty raised by President Donald Trump’s tariffs and the lingering effects of higher interest rates designed by the Federal Reserve in 2022 and 2023 to curb rising inflation caused by the pandemic.
Economists are conflicted over whether January’s stronger-than-expected job gains are a one-off or perhaps the first sign of a labor market recovery, which could prompt the Fed to further delay further cuts in its key interest rate.
Some Fed officials have specifically argued that last year’s weak hiring shows that borrowing costs are weighing on growth and discouraging companies from expanding. The continued rise in employment could undermine this theory.
Fed officials indicated in December that they expect to cut their key interest rate again this year, while investors on Wall Street expect two cuts, according to futures pricing.
The Labor Department’s jobless claims report on Thursday also showed that the four-week moving average of jobless claims, which offsets some weekly fluctuations, rose by 7,000 to 219,500.
The total number of Americans filing for unemployment benefits for the previous week ending January 31 rose by 21,000 to 1.86 million, the government said.
