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  • Weekly jobless claims fell by 3,000 to 183,000
  • Continuing claims fell by 11,000 to 1.655 million
  • Productivity accelerated 3.0 percent in the fourth quarter
  • Unit labor costs are growing at a rate of 1.1%

WASHINGTON, Feb 2 (Reuters) – The number of Americans filing new claims for jobless benefits fell to a nine-month low last week as the labor market remained resilient despite higher borrowing costs and growing fears of a recession this year.

A surprise drop in weekly jobless claims reported by the Labor Department on Thursday prompted cautious optimism that the expected decline will be shallow and short-lived. Federal Reserve Chairman Jerome Powell told reporters on Wednesday that “the economy can return to 2% inflation without a really significant recession or a really big increase in unemployment.”

“Job cuts remain low and demand for workers is still strong,” said Rubiela Faruqi, chief U.S. economist at High Frequency Economics in White Plains, New York. “The labor market has yet to respond meaningfully to the rapid rise in interest rates.” Initial claims for state jobless benefits fell by 3,000 to a seasonally adjusted 183,000 for the week ended Jan. 28, the lowest level since April 2022. It was the third straight weekly decline in filings. Economists polled by Reuters had forecast 200,000 claims for the past week.

Last week, unadjusted claims fell by 872 to 224,356. Kentucky, California and Ohio saw significant filing declines, which offset increases in Georgia and New York.

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Claims have declined this year, consistent with continued labor market tensions. The government reported on Wednesday that 11 million jobs had been created at the end of December, or 1.9 jobs for every unemployed person.

Outside the technology industry and interest-rate-sensitive sectors such as housing and finance, employers have been reluctant to lay off workers after struggling to find labor during the pandemic and because they are optimistic that economic conditions will improve later this year.

A report from the Institute for Supply Management on Wednesday said producers “indicate they are not planning to cut headcount significantly as they are bullish on the second half of the year.”

US stocks rose. The dollar has become more expensive against the basket of currencies. The yield of the US Treasury has fallen.


The US central bank on Wednesday raised its policy rate by 25 basis points to a range of 4.50%-4.75% and promised “continued increases” in borrowing costs.

The claims report showed that the number of people receiving benefits fell by 11,000 to 1.655 million in the week ending Jan. 21 after the first week of relief as a proxy for employment. That partially reversed gains seen in the previous two weeks. are called continuous requirements.

The claims data has no bearing on the January employment report, due out on Friday, as it is outside the survey period. Nonfarm payrolls likely rose by 185,000 jobs last month, according to a Reuters poll of economists.

The economy created 223 thousand jobs in December. From 3.5% in December, the unemployment rate is 3.6%.

Tech layoffs added to job losses in January. A separate report from global firm Challenger, Gray & Christmas on Thursday showed job cuts announced by US-based employers rose 136% to 102,943. That was the highest January reading since 2009.

The technology sector accounted for 41% of the job cuts, with 41,829 job cuts. Retailers announced 13,000 job cuts, while financial firms planned to cut 10,603 jobs.

Despite the tight labor market, wage inflation is slowing and may continue as the Labor Department’s third report showed worker productivity rose at a 3.0% annual rate in the fourth quarter, after rising 1.4% in the third quarter.

Productivity fell at a rate of 1.5% compared to a year ago, and will decrease by 1.3% in 2022. But this was largely due to distortions as the economy adjusted from shocks caused by the COVID-19 pandemic. Productivity increased by 5.1% compared to the fourth quarter of 2019.

As a result, unit labor costs, the price of labor per unit of output, rose at a 1.1% pace, after rising at a 2.0% pace in the third quarter. While unit labor costs rose at a 4.5% pace from a year ago, they were below 7.0% in the 12 months to the second quarter of 2022.

“The result is that even without rising unemployment and the questionable resilience of job openings, the labor market no longer appears to be a significant source of inflationary pressure,” said Paul Ashworth, chief North American economist at Capital Economics in Toronto. .

Reporting by Lucia Mutikani; Editing by Andrea Ricci

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