Jobless Claims Fall to Lowest Level Since April ’22
- Initial Jobless Claims in the US decreased by 3,000 in the week ending January 28.
- US Dollar Index stays slightly above 101.00 after the data.
There were 183,000 initial jobless claims in the week ending January 28, the weekly data published by the US Department of Labor (DOL) showed on Thursday. This print followed the previous week’s print of 186,000 and came in better than the market expectation of 200,000. Additionally, the advance seasonally adjusted insured unemployment rate was 1.1% and the 4-week moving average was 191,750, a decrease of 5,750 from the previous week’s revised average.
The past year has seen close monitoring of weekly jobless claims due to the Federal Reserve’s rapid pace of rate hikes. Last week, the Bureau of Labor Statistics reported the addition of 223,000 jobs in December, and weekly jobless claims, a leading indicator of a weakening labor market, showed no significant increase. Despite low numbers, economists expect the US economy to enter a recession, induced by the Federal Reserve, at some point in the coming year. This follows the central bank’s recent decision to raise rates by a quarter of a percentage point on Wednesday.
Rate hikes can take time to spread across the economy and cause recessionary conditions and job losses. As the rate hikes start affecting the economy, jobless claims are expected to rise, and monthly job gains to decline. The declining inflation, measured by the consumer price index, shows a decrease from 9% in June to 6.5% in December. Although still above the Federal Reserve’s target of 2%, it marks a significant decrease. However, with the number of recent layoffs in the tech sector, it begs the question, “Will we begin to see a snowball effect, that gets beyond our control?”