New applications for unemployment benefits rose for the second week in a row last week but remained near historic lows in a sign of a tight U.S. labor market.
Initial jobless claims, a proxy for layoffs, increased by 1,000 to 203,000 last week from the previous week’s revised level of 202,000, the Labor Department said Thursday.
Filings for unemployment benefits have approached the record lows set in 1968 this year. The four-week average for claims, which smooths out volatility in the weekly figures, rose to 192,750 last week.
The recent level of claims is just below prepandemic averages and consistent with tight labor market conditions, wrote
Nancy Vanden Houten,
lead U.S. economist at Oxford Economics, in a note to clients.
“With job openings and quits at a record high, employers will keep layoffs to a minimum,” Ms. Vanden Houten said.
In a separate report last week, the Labor Department said that the number of job openings had risen to 11.5 million in March, the highest since records began in 2000. The tight labor market has prompted workers to look for better opportunities. Roughly 4.5 million people quit their jobs in March, the department said.
Thursday’s report showed continuing claims, a proxy for the total number of people receiving payments from state unemployment programs, fell to 1.3 million for the week ended April 30, the lowest level since January 1970. Continuing claims are reported with a one-week lag.
Other data point to a strong labor market. Employers added 428,000 jobs in April, pushing the unemployment rate down to 3.6%, just shy of its prepandemic level of 3.5%, the Labor Department reported Friday.
In a separate report last week, the department said that the number of job openings had risen to 11.5 million in March, highest since records began in 2000.
The tight labor market has prompted workers to look for better opportunities. Roughly 4.5 million people quit their jobs in March, the department said.
Wages have been rising as well. Earnings in April were up 5.5% from the previous year, the Labor Department said, well above the wage increases before the pandemic. Still, those wage gains aren’t keeping up with historically high inflation.
Federal Reserve officials are steadily raising interest rates to curb high inflation, which could cool the labor market somewhat in the coming months. But that likely won’t push up unemployment claims much, Ms. Vanden Houten said.
“Even as the economy slows in response to high inflation and rising interest rates we expect employers will slow the pace of hiring well in advance of laying off workers,” she wrote.
Write to David Harrison at [email protected]
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