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222,000 Americans File for Unemployment Benefits as Job Market Shows Signs of Cooling | Layoffs Remain Historically Low

(photo: Rappler)

Despite slower hiring, U.S. weekly jobless claims remained low, hinting at a cooling labor market and has potential interest rate cuts by the Federal Reserve loom amidst layoffs across sectors.

Weekly Jobless Claims at Historic Low Despite Slower Hiring

Last week, fewer Americans filed for unemployment benefits maintaining historically low layoff rates despite some signs of a cooling job market. Jobless claims fell to 222,000, a decrease of 10,000 from the previous week. Although this is the highest number since August 2023 layoffs are still relatively low.

The four-week average of claims which smooths out weekly fluctuations, rose slightly to 217,750. These claims are a key indicator of layoffs in the U.S. and give insight into the job market’s direction remaining low since the pandemic began.

In April, the U.S. saw a slower pace of hiring with employers adding only 175,000 jobs the fewest in six months. This, coupled with a slight rise in the unemployment rate to 3.9%, suggests a moderation in the labor market, though the unemployment rate has remained below 4% for a record 27 months, according to the report of AP News.

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(photo: Spectrum News)

Federal Reserve May Weigh Interest Rate Cut Amid Cooling Job Market and Slower Wage Growth

Given signs of a cooling job market and slower wage growth and the Federal Reserve may consider lowering interest rates. April’s consumer inflation data, showing a slowdown in inflation, could influence this decision. This follows the Fed’s 11 consecutive rate hikes since March 2022 to combat inflation post-2020 recession.

Despite overall economic health, layoffs have been announced across various sectors notably in technology and media including companies like Alphabet, Apple, and eBay. Others, like Walmart, Peloton, Stellantis, Nike, and Tesla, have also announced job cuts recently.

In total, 1.79 million Americans were receiving unemployment benefits as of the week ending May 4, up 13,000 from the previous week. This highlights ongoing changes in the labor market amidst evolving economic conditions.

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