Applications had remained below 200,000 for seven consecutive weeks, indicating that major job cuts in the technology sector had not had a material impact on the labor market.
On Wednesday, 1.9 job offers were published for every unemployed person in January. The Federal Reserve (Fed) Beige Book described the job market as “solid” in February, also noting “scattered reports of layoffs” and that “finding workers with the desired skills or experience remained a challenge.”
With the job market stubbornly tight, inflation readings strong and consumer spending robust in January, Fed Chairman Jerome Powell told lawmakers this week that the US central bank would likely have to raise interest rates further. than expected.
Financial markets have priced in a 50 basis point rate hike at the Fed’s March 21-22 policy meeting, according to CME Group’s FedWatch tool.
Since last March, the Federal Reserve has increased its interest rates by 450 basis points, from a level close to zero to a range between 4.5% and 4.75%.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased by 69,000 to 1.718 million during the week ending February 25, the claims report also showed. So-called continuing orders remain low, suggesting that some laid-off workers could easily be finding new work.
The claims data does not influence the February jobs report, which is scheduled for release on Friday, as it falls outside the survey period.
According to a Reuters poll of economists, nonfarm payrolls are likely to increase by 205,000 jobs in February, after growing by 517,000 in January. The unemployment rate is expected to remain at its lowest level in 53 1/2 years at 3.4%.
However, the job market is cooling off at the margins. According to a report by the outplacement company Challenger, Gray & Christmas, job cuts announced by US companies fell 24% in February, to 77,770 positions. But expected layoffs increased 410% over the same period a year earlier. It was also the highest February total since 2009.
The job cuts were concentrated in the technology sector, which accounted for 28% of the layoffs announced last month. Retailers and financial firms are also downsizing.
