More Americans File for Unemployment Benefits Last Week, But Layoffs Remain Historically Low
The number of Americans applying for unemployment benefits increased last week, signaling a small uptick in the job market’s movement. However, layoffs remain at historically low levels, reflecting a still-healthy overall job climate.
The applications for jobless benefits climbed by 14,000 for the week ending January 11, according to the Labor Department. This rise brought the total applications up from the previous week’s 203,000, which had been the lowest figure recorded since February of last year.
In terms of averages, the four-week average of jobless claims—a metric used to smooth out some of the week-to-week volatility—decreased slightly by 750, setting it at 212,750. Meanwhile, the total number of Americans receiving unemployment benefits for the week of January 4 decreased by 18,000, reaching a total of 1.86 million.
Weekly applications for jobless benefits are typically seen as an indicator for layoffs in the economy. Despite some emerging signs of labor market weakness observed in early 2024, jobs remain widely available and layoffs are minimal, maintaining a generally healthy employment landscape.
Last week, the Labor Department provided further evidence of economic resilience, reporting a surge in job growth for December with a decrease in unemployment. Employers added 256,000 jobs during the month, and the unemployment rate edged down to 4.1%, demonstrating robust labor market performance.
The final jobs report of 2024 highlighted an economy and labor market able to expand at a solid pace, even amidst much higher interest rates than those seen prior to the pandemic. Consequently, this could result in the Federal Reserve being less inclined to reduce borrowing costs again in the near future, following three rate cuts towards the end of 2024.
In a broader sense, these strong job numbers suggest that the economy is transitioning into a post-COVID era characterized by steady growth, relatively high interest rates, low unemployment, and slightly heightened inflation.
Additionally, government data released last week showed an unexpected rise in U.S. job openings during November. This increase indicates that companies are still in search of workers, even as the labor market becomes more flexible. Job openings rose to 8.1 million in November, marking the highest number since February and an increase from the 7.8 million reported in October.
