The number of people applying for unemployment benefits in the US fell for the third straight week last week, amid growing speculations about the Fed reverting to an increased interest rate cut next month to tame rising inflation.
Applications for jobless claims in the US for the week ending February 25 fell to 190,000 from 192,000 the previous week, the Labor Department said Thursday, AP reported.
It’s the seventh straight week claims were under 200,000.
About 1.66 million people were receiving jobless aid the week that ended Feb.18, a decrease of 5,000 from the week before.
The four-week moving average of claims, which evens out some of the weekly volatility, rose by 1,750 to 193,000, remaining below the 200,000 threshold for the sixth straight week.
Applications for unemployment benefits are considered a proxy for the number of layoffs in the US.
In February, the Fed raised its main lending rate by 25 basis points, its eighth rate hike in less than a year.
The central bank’s benchmark rate is now in a range of 4.5 percent to 4.75 percent, its highest level in 15 years.
The Fed’s hawkish interest rate policy appeared to be slowing inflation, but recent data has suggested otherwise.
Some economists now expect the Fed to raise its benchmark rate by a substantial half-percentage point when it meets later this month.
The Fed’s rate hikes have done little to cool a red-hot US job market, which has put upward pressure on wages, and as a result, prices.
Last month, the US government reported that employers added a better-than-expected 517,000 jobs in January and that the unemployment rate dipped to 3.4 percent, the lowest level since 1969.
Fed policymakers have forecast that the unemployment rate would rise to 4.6 percent by the end of this year, a sizable increase historically associated with recessions.
Though the US labor market remains strong, layoffs have been mounting in the technology sector, where many companies over-hired after a pandemic boom.
IBM, Microsoft, Amazon, Salesforce, Facebook parent Meta, Twitter and DoorDash have all announced layoffs in recent months.
The real estate sector in the US has also been battered by the Fed’s interest rate hikes, with higher mortgage rates – currently above 6 percent – slowing home sales for 12 straight months.
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