Fewer Americans applied for unemployment benefits last week. That reflects a low number of layoffs across the board. Layoffs are generally tracked by first-time applications for jobless aid. These numbers are almost back to healthy pre-pandemic levels.
Unemployment Benefits Claims Have Hit Lowest Level in Decades
Jobless claims fell by 18,000 for the week ending on February 26. That week, there were 215,000 unemployment claims. The week before that, there were 233,000 unemployment claims, according to the Labor Department.
The four-week average for unemployment benefits claims also fell. The average, which accounts for weekly volatility, fell by 6,000 to 230,500.
In total, there were 1,476,000 Americans collecting jobless aid during the week that ended on February 12. That was a small uptick of 2,000 from the week before. The week before that had its numbers revised, but showed that claims had been at their lowest level since March 14, 1970. Right now, the unemployment rate stands at about 4%. This is a historically low figure, according to ABC News.
This data comes from the Labor Department’s jobs report, which was released in full on Friday, March 4.
U.S. Adds Astounding Number of Jobs in February
Analysts had forecast that the U.S. would add roughly 400,000 new jobs in the month of February. However, companies across the country have vastly exceeded those expectations. The actual number of new jobs grew to 678,000. This outperformed economists’ expectations by over 50%.
Not only that, but the February jobs report showed positive signs of wage gains. As the U.S. economy begins to heal from the COVID pandemic, wages are on the rise. Unfortunately, so are prices.
The jobs report will be used to help the Federal Reserve decide if it wants to raise interest rates this month. It’s expected that the Fed will decide to raise rates. They haven’t done this since 2018. This is an effort to combat surging inflation, which is at an all-time high. The average rate of inflation is around 7.5%, but some areas in the U.S. are experiencing inflation rates of 9%.
Wage growth is only a small factor in this recent sky-high level of inflation. There are a number of other factors that play a bigger part in how our economy operates, such as profits and supply issues. However, the Federal Reserve will still be looking towards job growth and wage growth to help determine what their interest rates should be set to.
The Federal Reserve’s meeting will happen sometime in mid-March. Then, we will know if interest rates will be going up. If they do, it’s likely to be by a quarter-point. As the year progresses, more quarter-point raises would likely follow. At this point, interest rate increases are pretty much inevitable.