Jobless claims rose slightly last week, but the total number of Americans receiving jobless benefits reached its highest level in more than three years.
Claims for unemployment benefits increased by 6,000 to 223,000 for the week ending Jan. 18, the Labor Department said Thursday. Analysts expected 219,000 new applications.
Weekly claims for unemployment benefits are considered an indicator of layoffs.
The total number of Americans receiving unemployment benefits for the week of January 11 increased by 46,000 to 1.9 million, the highest number since November 2021.
The rising level of continued claims and the overall number of Americans collecting unemployment benefits suggest that some of those receiving benefits are having a harder time finding new employment. This could mean demand for workers declines, even if the economy remains strong.
The four-week average of continuing claims is about 100,000 higher than a year ago.
Even though some signs of weakness in the labor market have appeared in 2024, jobs remain plentiful and layoffs are historically low.
Earlier this month, the Labor Department reported a sharp rise in job growth in December and a decline in unemployment. Employers added 256,000 jobs last month and the unemployment rate fell to 4.1%.
The final 2024 jobs report highlights that the economy and hiring were able to grow at a solid pace, even with interest rates much higher than before the pandemic. As a result, the Federal Reserve may be much less likely to cut borrowing costs again in the coming months, after announcing three reductions in late 2024.
Overall, the strong jobs figures suggest the economy is entering a post-Covid period of steady growth, higher interest rates, low unemployment and slightly elevated inflation.
Although layoffs remain healthy by historical standards, several high-profile companies have announced job cuts in recent months.
Facebook parent Meta announced earlier this month that it was laying off 5% of its staff and spirits giant Brown-Forman – the maker of Jack Daniel’s – said it was reducing its global workforce. ‘around 12%.
By the end of 2024, GM, Boeing, Cargill and Stellantis have all announced layoffs.
