The numbers: The number of Americans who applied for unemployment benefits in mid-February stayed below 200,000 for the fifth week in a row, signaling the U.S. labor market is still quite strong.
New applications slipped to 194,000 from a revised 195,000 in the prior week, the government said Thursday.
The number of people applying for jobless benefits is one of the best barometers of whether the economy is getting better or worse. New unemployment filings remain near historically low levels.
Economists polled by the Wall Street Journal had forecast that new claims would total 200,000 in the seven days ending Feb. 11. The figures are seasonally adjusted.
Key details: Thirty-five of the 53 U.S. states and territories that report jobless claims showed a decrease last week. Eighteen posted an increase.
New claims have ranged from a high of 241,000 to a low of 183,000 since Thanksgiving. By most measures, the labor market is still quite robust.
The number of people already collecting unemployment benefits, meanwhile, rose by 16,000 to a three-month high of 1.7 million in the week ending Feb. 4. They are reported with a one-week lag.
These so-called continuing claims are still low, but a gradual increase since last spring suggests it’s taking a bit longer for people who lose their jobs to find new ones.
Big picture: Jobless claims are one of the first indicators to sound the alarm when the U.S. is headed toward recession. So far they are not showing much trouble for the economy, notwithstanding a flurry of layoffs at large companies.
Yet hiring is bound to slow and layoffs rise, economists say, as higher interest rates mounted by the Federal Reserve depress economic growth. The Fed is raising rates to try to quell high inflation.
The string of low jobless claims suggest the Fed might have to raise rates even higher to cool off the economy and put a chill on high inflation.
Looking ahead: “Although company layoff reports are becoming more common, those layoffs are not yet showing up in the unemployment insurance data,” said Stuart Hoffman, senior economic adviser at PNC Financial Services.
“Some of this may be timing,” he added. “If the company offers severance the claims are not counted until the severance expires. But even so, the job market remains remarkably strong.”
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
fell in Thursday trades after a sharp increase in producer prices, another sign that inflation won’t subside rapidly.
