U.S. applications for unemployment benefits inched up modestly this week after reaching their lowest level in eight months the previous week, as the labor market continues to defy the Federal Reserve’s interest rate hikes meant to cool it.
Filings for jobless claims rose by 2,000 to 204,000 for the week ending Sept. 23, the Labor Department reported Thursday. Last week’s figure was the lowest since January.
Jobless claim applications are seen as representative of the number of layoffs in a given week.
The four-week moving average of claims, which quiets some of the week-to-week noise, fell by 6,250 to 211,000.
Though the Federal Reserve opted to leave its benchmark borrowing rate alone last week, it is well into the second year of its battle to squelch four-decade high inflation. Part of the Fed’s goal in that fight has been to cool the labor market and bring down wages, but so far that hasn’t happened.
The whopping 11 interest rate hikes since March of last year have helped to curb price growth, but the U.S. economy and labor market have held up better than most expected.
Earlier this month, the government reported that U.S. employers added a healthy 187,000 jobs in August. Though the unemployment rate ticked up to 3.8%, it’s still low by historical measures.
U.S. businesses have 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.
Besides some layoffs early this year — mostly in the technology sector — companies have 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, 1.67 million people were collecting unemployment benefits the week that ended Sept. 16, about 12,000 more than the previous week.