The number of first-time claims for unemployment insurance fell unexpectedly to 190,000 for the week ending January 14, according to Department of Labor data released Thursday.
The latest total is the lowest in 15 weeks and far below economists’ expectations of 214,000, according to consensus estimates on Refinitiv.
The steady level of initial claims, which are considered a proxy for layoffs, show that the labor market remains tight.
Continuing claims, which measure the number of people filing for ongoing unemployment benefits, totaled 1.65 million for the week ending January 7. That’s up from the previous monthly tally of 1.63 million.
Weekly jobless claims data is volatile and frequently subject to revision, especially around the holidays.
The four-week moving average of initial claims, which lessens some of that volatility, was 212,500, down from 214,250 during the last week of December. Through 2019, that four-week moving average hovered at around 218,000, Labor Department data shows.
The US labor market has remained strong despite pandemic-related ripple effects, geopolitical uncertainty, soaring inflation and the Federal Reserve’s attempts to knock down the surging prices.
“The Fed would welcome a more substantial slowing in job growth,” said Stuart Hoffman, senior economic adviser for PNC Financial Services, in a statement Thursday. “Right now, the labor market is too tight for the Fed, and job growth is too strong, with average monthly gains of 247,000 payroll jobs in the three months through December 2022.”
In recent months, job growth has slowed and layoff announcements — particularly from technology firms — have become more widespread. But that doesn’t necessarily equate to more joblessness, said Robert Frick, corporate economist at Navy Federal Credit Union.
“While layoffs from high-profile firms make the headlines, plenty of firms are desperate for more workers, especially tech workers. Those workers are in high demand from the auto industry to the Department of Veterans Affairs to not-for-profits,” he said.
“The labor market is still so tight that many tech workers, and workers with other skills, are snapped up well before they need to collect an unemployment check. And they are more likely to be snapped up by smaller firms, which have a much greater demand for workers than major corporations,” Frick added.