Jobless Claims Fell by 15,000 Last Week

By Sarah Chaney Cambon

Jobless claims declined last week to the lowest level since September, suggesting the labor market remained tight at the start of the year.

Initial jobless claims, a proxy for layoffs, fell by 15,000 to a seasonally adjusted 190,000 last week, the Labor Department said Thursday. Claims are up from lows reached early in 2022, but continue to hover near prepandemic levels when the job market also was tight.

The four-week moving average of weekly claims, which smooths out volatility, decreased to 206,000 from 212,500 the prior week. In 2019, the year before the pandemic began, claims averaged about 220,000 a week.

The U.S. labor market remains strong but has gradually lost steam in recent months. Employers added 223,000 jobs in December, the smallest gain in two years. There were 10.5 million job openings in November, down from the peak 11.9 million in March, but far exceeding the number of unemployed Americans seeking work.

The economy is slowing as the Federal Reserve raises its benchmark short-term interest rate to slow the economy and bring down historically high inflation. U.S. consumers cut back on retail spending last month on vehicles, electronics and furniture, the Commerce Department said Wednesday.

Some large companies have recently laid off workers or announced job cuts, particularly in the interest-rate sensitive technology and finance sectors. Microsoft Corp. said Wednesday that it was laying off 10,000 employees. Unity Software Inc. said on Tuesday it was laying off 284 employees.

Corporate job cuts have yet to drive up workers' claims for unemployment benefits. Workers generally can't seek jobless benefits until after they separate from the company, which can be weeks after the layoff announcement. Also, some workers might quickly find new jobs in a still-tight labor market and forgo seeking benefits.

Continuing claims, which reflect the number of people seeking ongoing unemployment benefits, ticked up to 1.65 million in the week ended Jan. 7 from 1.63 million a week earlier. Continuing claims remain at low levels, but they have moved somewhat higher in recent months, a sign some unemployed Americans are taking longer to find new positions.

Write to Sarah Chaney Cambon at [e-mail]

(END) Dow Jones Newswires

01-19-23 0901ET