Applications for US jobless benefits fall again as labour market powers on

The Federal Reserve raised its benchmark borrowing rate 11 times beginning in March of 2022 in an effort to bring down the four-decade-high inflation that took hold after the economy roared back from the COVID-19 recession of 2020.

Many economists expected the rapid rate hikes to weaken the labour market and potentially tip the country into recession, but it hasn't happened. Jobs have remained plentiful and the economy has held up better than forecast thanks to strong consumer spending.

US employers delivered a stunning burst of hiring to begin 2024, adding 353,000 jobs in January in the latest sign of the economy’s continuing ability to shrug off the highest interest rates in two decades.

Last month’s job gain — roughly twice what economists had predicted — topped the December gain of 333,000, a figure that was revised sharply higher. The unemployment rate stayed at 3.7% and has been below 4% for 24 straight months — two full years — the longest such streak since the 1960s.

Though layoffs remain at low levels, there has been an uptick in job cuts recently across technology and media. Google parent company Alphabet, eBay, TikTok, Snap and the Los Angeles Times have all recently announced layoffs. Last week, Cisco Systems announced it was cutting 4,000 jobs.

Outside of tech and media, UPS, Macy’s and Levi’s also recently cut jobs. In total, 1.86 million Americans were collecting jobless benefits during the week that ended February 10, a decrease of 27,000 from the previous week.

Though inflation has eased considerably in the past year, the Labor Department reported last week that consumer prices remain well above the Fed’s 2% target. The Fed has left rates unchanged at its last four meetings.