WASHINGTON: The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, offering more evidence of the economy’s resilience despite tighter monetary policy.
Initial claims for state unemployment benefits slipped 1,000 to a seasonally adjusted 194,000 for the week ended Feb. 11, the Labor Department said on Thursday. Economists polled by Reuters had forecast 200,000 claims for the latest week.
Claims remain low despite high-profile layoffs in the technology sector and other industries highly sensitive to interest rates. Some of the laid-off workers are likely finding new work or are delaying filing for benefits because of severance packages.
Companies are generally reluctant to lay off workers after experiencing difficulties recruiting during the pandemic. The National Federation of Independent Businesses reported this week that the share of small businesses reporting job openings increased in January, saying this suggested that “owners are still seeing opportunities to grow their business.”
The claims report also showed the number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 16,000 to 1.696 million during the week ending Feb 4.
Fed’s Mester says more rate hikes needed to combat inflation
Labor market resilience, marked by the lowest unemployment rate in more than 53 years, is one of the factors that have left financial markets anticipating that the Federal Reserve could continue raising interest rates through summer.
Retail sales surged by the most in nearly two years in January, while the disinflationary process hit a bump last month, government data showed this week.
The US central bank has raised its policy rate by 450 basis points since last March from near zero to a 4.50%-4.75% range, with the bulk of the increases between May and December.
Two additional rate hikes of 25 basis points are expected in March and May. Financial markets are betting on another increase in June.
A second report from the Labor Department on Thursday showed monthly producer prices accelerating in January. The producer price index for final demand rebounded 0.7% last month after decreasing 0.2% in December.
In the 12 months through January, the PPI increased 6.0% after advancing 6.5% in December. Economists had forecast the PPI climbing 0.4% and rising 5.4% year-on-year.
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