The number of Americans filing claims for unemployment benefits rose moderately last week amid low layoffs, underscoring labour market stability and strengthening financial market expectations that the Federal Reserve will not cut interest rates this year.
The weekly jobless claims report from the Labour Department yesterday, the most timely data on the economy’s health, continued to show no clear signs of labour market stress from an oil price shock triggered by the US-Israel war with Iran.
Fewer people were collecting unemployment checks towards the end of April, though that drop could be the result of some people exhausting their eligibility, which is limited to 26 weeks in most states.
Low levels of layoffs are anchoring the labour market.
“Fed officials cut interest rates last year because of worries over joblessness and a higher unemployment rate, but right now, there is no reason to consider interest rate cuts whatsoever because the labour market is steady as a rock,” said Christopher Rupkey, chief economist at FWDBONDS.
Initial claims for state unemployment benefits rose 10,000 to a seasonally adjusted 200,000 for the week ended May 2, the Labour Department said.
Economists polled by Reuters had forecast 205,000 claims for the latest week.
The increase partially unwound the prior week’s decline, which had pushed claims to a level last seen in 1969.
Government data on Tuesday showed there were 0.95 job openings for every unemployed person in March versus 0.91 in February, consistent with a stable labour market.
Despite a raft of layoff announcements by big technology firms related to the adoption of artificial intelligence for some job roles, claims have remained below the 230,000 level this year.
Economists speculate that laid-off technology workers are most likely receiving generous severance packages.
A report from global outplacement firm Challenger, Gray and Christmas on Thursday showed US-based employers announced 83,387 job cuts in April, up 38 per cent from March.
The tally was, however, down 21pc from last year.
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