Associated Press Business Writer Matt Ott
U.S. applications for unemployment benefits fell last week as employers continue to keep workers up despite resurgent inflation and rising interest rates.
The Labor Bureau said Thursday that the number of Americans applying for unemployment benefits has dropped from 7,000 to 213,000, the Labor Bureau said. Analysts predicted 215,000 new applications would be submitted.
The weekly application of unemployment benefits is considered representative of layoffs.
The four-week average smoothed out some of the weekly volatility, going from 1,000 to 216,000.
Despite showing signs of weakening over the past year, the labour market remains healthy with abundant jobs and relatively few layoffs.
Last week, the Labor Bureau reported that U.S. employers added 143,000 jobs in January, significantly lower than the 256,000 employment benefits in December. However, the unemployment rate drops to another 4%, indicating a very healthy labor market.
In late January, the Federal Reserve left only the benchmark lending rate after issuing three cuts in late 2024. Fed officials are closely monitoring inflation and labor markets of indications that could weaken the economy. They are only looking forward to two interest rate cuts this year, which will decrease from the previous four projections.
However, after Wednesday’s consumer pricing report on Wednesday, when inflation accelerated last month, many experts believe the Fed will not be able to cut at all this year.
The consumer price index rose 3% in January, up from the 3.5-year low of 2.4% in September. New data shows that it has stubbornly surpassed the Fed’s 2% target for the past six months after a steady decline after about a year and a half.
Overall, layoffs remain low by historical standards, but many companies have already announced their jobs this year.
Workday, Dow, CNN, Starbucks and Facebook’s parent company Meta has already trimmed its workforce in 2025.
In late 2024, GM, Boeing, Cargill and Stellantis announced their layoffs.
The total number of Americans receiving unemployment benefits on February 1 fell to 1.85 million, down 36,000 from the previous week.
Original issue: February 13, 2025 9:06am EST
