U.S. applications for jobless benefits held steady last week, maintaining a healthy level as the labor market continues to demonstrate strength despite elevated interest rates. The Labor Department reported that unemployment claims for the week ending March 2 remained unchanged at 217,000, matching the previous week's revised level.
The four-week average of claims, a less volatile measure, decreased by 750 from the previous week to 212,250. Weekly unemployment claims are widely regarded as indicative of the number of layoffs in the U.S. during a given week and have consistently stayed at historically low levels since the significant job losses experienced during the pandemic in 2020.
As of the week ending February 24, a total of 1.9 million Americans were collecting jobless benefits, marking an increase of 8,000 from the previous week and the highest number since November. The Federal Reserve initiated 11 rate hikes starting in March 2022 to combat soaring inflation levels following the economic recovery from the COVID-19 recession in 2020. The Fed aimed to ease the labor market and temper wage growth, factors believed to contribute to the persistent high inflation.
Despite concerns that the rapid rate hikes could push the country into a recession, the economy has remained resilient, with ample job opportunities and robust consumer spending. In January 2024, U.S. employers added 353,000 jobs, underscoring the economy's ability to withstand the highest interest rates in two decades.
The current unemployment rate stands at 3.7%, maintaining a streak of being below 4% for 24 consecutive months, the longest since the 1960s. The Labor Department is set to release its February jobs report on Friday.
While overall layoffs have stayed low, there has been a recent uptick in job cuts, particularly in the technology and media sectors. Companies such as Google parent Alphabet, eBay, TikTok, Snap, Cisco Systems, and the Los Angeles Times have announced layoffs. Beyond tech and media, UPS, Macy's, and Levi's have also implemented job cuts.
