Jobless claims were subdued last week, but the number of Americans receiving unemployment benefits rose to the highest level in more than three years.
Claims for unemployment benefits rose 6,000 to 223,000 in the week ended Jan. 18, the Labor Department said Thursday. Analysts had expected 219,000 new applications.
Weekly claims for unemployment benefits are considered a substitute for layoffs.
The number of Americans receiving unemployment benefits rose by 46,000 to 1.9 million in the week of January 11, the most since November 2021.
The growing level of ongoing claims, the number of Americans receiving unemployment benefits, suggests that some who are receiving benefits are having a harder time finding new jobs. This could mean that the demand for workers is decreasing even though the economy remains strong.
The four-week average of continuous claims is about 100,000 higher than a year ago.
Although some signs of labor market weakness emerged in 2024, jobs are still plentiful and layoffs are historically low.
Earlier this month, the Department of Labor announced this employment growth increased in December and unemployment fell. Employers added 256,000 jobs last month and the unemployment rate fell to 4.1%.
The latest jobs report for 2024 highlights that the economy and hiring grew at a solid pace, even with interest rates much higher than during the pandemic. As a result, the Federal Reserve is likely to cut borrowing costs again in the coming months, after making three cuts in late 2024.
Overall, the strong employment figures suggest that the economy is entering a period of continued 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’s Meta announced earlier this month that it was 5% layoff his employee and spirit giant Brown-Forman – the maker of Jack Daniel’s – said reducing its global workforce by around 12%.
By the end of 2024, GM, Boeing, Cargill and Stellantis had announced layoffs.
