The number of Americans applying for unemployment benefits last week ticked up modestly after falling to the lowest level in seven months the week before, as companies continue to retain employees despite the Federal Reserve’s efforts to cool the economy.
U.S. applications for jobless claims rose by 3,000 to 220,000 for the week ending Sept. 9, the Labor Department reported today.
Jobless claim applications are seen as representative of the number of layoffs in a given week.
The four-week moving average of claims, a less volatile measure, fell by 5,000 to 224,500.
The Federal Reserve is well into the second year of its battle against inflation, having raised interest rates 11 times since March of last year. At 5.4%, the Fed’s benchmark borrowing rate is at the highest level in 22 years.
The Fed’s rate hikes are meant to cool the job market and bring down wages, which many economists believe helps to ease pressure on price growth. Though some measures of inflation have retreated significantly — from as much as 9% down closer to 3% — since the Fed started raising interest rates, the job market has held up better than most expected.
Earlier this month, the government reported that U.S. employers added 187,000 jobs in August, another sign of a healthy labor market. Though the unemployment rate ticked up to 3.8%, it’s still low by historical measures.
The U.S. economy has been adding an average of about 236,000 jobs per month this year, down from the pandemic surge of the previous two years, but still a strong number.
Recent government data also showed that job openings dropped to 8.8 million in July, the fewest since March 2021 and down from 9.2 million in June. However, the numbers remain unusually robust considering monthly job openings never topped 8 million before 2021.
Besides some layoffs in the technology sector early this year, companies have mostly been trying to retain workers.
Many businesses struggled to replenish their workforces after cutting jobs during the pandemic, and a sizable amount of the ongoing hiring likely reflects efforts by firms to catch up to elevated levels of consumer demand that emerged since the pandemic recession.
Overall, 1.69 million people were collecting unemployment benefits the week that ended Sept. 2, about 4,000 more than the previous week.
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