U.S. applications for unemployment benefits fell last week as employers continue to retain workers despite resurgent inflation and elevated interest rates.
The number of Americans filing for jobless benefits fell by 7,000 to 213,000 for the week ending February 8, the Labor Department said Thursday. Analysts projected that 215,000 new applications would be filed.
Weekly applications for jobless benefits are considered representative of layoffs.
The four-week average, which smooths out some of the week-to-week volatility, inched down by 1,000 to 216,000.
Despite showing some signs of weakening during the past year, the labor market remains healthy with plentiful jobs and relatively few layoffs.
Last week, the Labor Department reported that U.S. employers added 143,000 jobs in January, significantly fewer than December’s 256,000 job gains. However, the unemployment rate ticked down to an even 4%, signaling a still very healthy labor market.
Late in January, the Federal Reserve left its benchmark lending rate alone after issuing three cuts late in 2024. Fed officials are closely monitoring inflation and the labor market for signs of a potentially weakening economy. They expect only two rate cuts this year, down from previous projections of four.
However, after Wednesday’s consumer prices report that showed inflation accelerated last month, many experts believe the Fed may not be moved to cut rates at all this year.
The consumer price index increased 3% in January from a year ago, up from a 3 1/2 year low of 2.4% in September. The new data shows that inflation has remained stubbornly above the Fed’s 2% target for roughly the past six months after it fell steadily for about a year and a half.
Overall, while layoffs remain low by historical standards, a host of companies have announced job cuts already this year.
Workday, Dow, CNN, Starbucks and Facebook parent company Meta have all trimmed their workforces already in 2025.
Late in 2024, GM, Boeing, Cargill and Stellantis announced layoffs.
The total number of Americans receiving unemployment benefits for the week of February 1 fell to 1.85 million, a decrease of 36,000 from the previous week.
