The US labor market remains strong despite some recent high-profile tech layoffs, with job openings rising above 11 million in December and the latest labor market report showing the economy was stronger than economists had first anticipated.
Initial jobless claims rose to 196,000 for the week ending February 4, the Labor Department said on Thursday, fractionally higher than the 190,000 expected but still leaving the four-week average for new jobless claims at an eight-month low of 189,250. The number of people already collecting unemployment benefits rose by 16,000 to a three-month high of 1.7 million in the week ending February 4.
Continuing claims, which include people who have already received unemployment benefits for a week or more, increased to 1.69 million in the week ended January 28. Economists polled by the Wall Street Journal had forecast that new claims would total 200,000 in the seven days ending February 11.
The US labor market remains firm in the backdrop of the Federal Reserve's 8 rate hikes in 11 months meant to cool the economy. The consistent figure of low unemployment claims could lead the Fed to increase rates even further in order to slow down the economy and help control high inflation.
The Bureau of Labor Statistics reported that annual consumer prices rose 8.5 percent in July, a decrease from June's 9.1 percent. A decrease of 0.5 percent in wholesale prices is another indication that inflation may be subsiding. This week, more information revealed that the annual consumer price inflation in the US, being the biggest economy, had a minor slowdown to 6.4% in the previous month. However, the rate of price increase is still much higher than the 2% goal fixed by the Federal Reserve.
On Wednesday, The Walt Disney Company, a major employer in Central Florida, declared it would be cutting 3 percent of its staff, equating to approximately 7,000 jobs worldwide, in an effort to save $5.5 billion.
Overall, the job market remains strong, but economists warn that layoffs are likely to pick up as the Federal Reserve continues to raise interest rates in an effort to cool the economy and reduce inflation. As the US economy heads into the new year, the Federal Reserve is likely to continue to keep a close eye on the labor market.
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