By PAUL WISEMAN (AP Economics Writer)
WASHINGTON (AP) — The amount of Americans registering for unemployment benefits dropped slightly last week, another sign that the labor market is solid and most workers have exceptional job security.
The Labor Department stated Thursday that unemployment claims decreased by 2,000 to 210,000. The four-week average of claims, which evens out weekly fluctuations, increased by 2,500 to 211,250.
In total, 1.8 million Americans were receiving unemployment benefits the week ending March 9, up a modest 4,000 from the prior week.
Requests for unemployment benefits are seen as an indicator for layoffs and a signal for where the job market is heading. Despite prominent job reductions at tech companies like Google parent Alphabet, eBay, and Cisco Systems, overall layoffs remain below levels before the pandemic. The unemployment rate, 3.9% in February, has stayed below 4% for 25 consecutive months, the longest streak since the 1960s.
The economy and the job market, bolstered by consumer spending, have proven resilient despite the Federal Reserve raising interest rates 11 times in 2022 and 2023 in an effort to counteract the inflation that arose in 2021. Inflation has dropped from a four-decade high of 9.1% in June 2022 to 3.2% in February — but remains above the central bank’s 2% target.
Hiring has decelerated from the rapid pace of three years ago but remains robust: Employers added a record 604,000 jobs per month in 2021, 377,000 in 2022 and 251,000 last year. In February, job creation unexpectedly rose to 275,000.
“Overall, layoffs continue at low levels,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. ”We anticipate job growth to slow to some extent but the unemployment rate to stay low this year.”
The combination of reduced inflation and a strong economy has raised hopes that the Fed can achieve a so-called soft landing and control price increases without pushing the economy into a recession. On Wednesday, the Fed indicated that it still expects to reverse policy and lower rates three times this year — a sign of confidence in the progress being made against inflation.
