The number of people in the US applying for jobless benefits has increased to 239,000 for the week ending April 8, which is the highest level since January 2022. However, this is still relatively low even though the Federal Reserve has been trying to cool the economy and job market in its battle against inflation. The four-week moving average of claims rose to 240,000, which is the highest since November 2021. The Labor Department released revised estimates of the number of applications for jobless benefits using a new formula that more accurately captures seasonal patterns in job losses.
The job market seems to be showing signs of softening more than a year after the Federal Reserve began an aggressive campaign to cool inflation by raising its benchmark borrowing rate nine times in about a year. Employers in America added 236,000 jobs in March, showing that the economy remains on solid footing despite the interest rate hikes. The unemployment rate fell to 3.5%, which is slightly above the 53-year low of 3.4% set in January. However, in its latest quarterly projections, the Fed predicts that the unemployment rate will rise to 4.5% by the end of the year.
The Labor Department reported that US job openings slipped to 9.9 million in February, which is the fewest since May 2021. Some details from Friday’s Labor Department report raised the possibility that inflationary pressures might be easing and that the Fed might soon decide to pause its rate hikes. Average hourly wages were up 4.2% from 12 months earlier, which is down sharply from a 4.6% year-over-year increase in February.
Layoffs have been mounting in the technology sector, where many companies hired aggressively during the pandemic. IBM, Microsoft, Salesforce, Twitter and DoorDash have all announced layoffs in recent months. Amazon and Facebook have each announced two sets of job cuts since November. About 1.81 million people were receiving jobless aid the week that ended April 1, which is close to pre-pandemic levels.