US weekly jobless claims continue to fall as labor market tightens

People line up outside a newly reopened career center for in-person appointments in Louisville, U.S., April 15, 2021. REUTERS/Amira Karaoud

Join now for FREE unlimited access to Reuters.com

Register

  • Weekly jobless claims fall from 18,000 to 215,000
  • Layoffs drop 20% in February; massive hiring

WASHINGTON, March 3 (Reuters) – The number of Americans filing new claims for unemployment benefits fell to its lowest level this year last week, while layoffs fell sharply in February, indicating that the recovery of the labor market accelerated.

Thursday’s upbeat reports bode well for Friday’s February jobs report. Economists predict another month of solid job growth as the wave of Omicron variant COVID-19 infections has fallen significantly.

“Unemployment claims at a new low since Omicron signals a stronger jobs report tomorrow where the labor market will leave its pandemic woes behind,” Christopher Rupkey, chief economist at FWDBONDS said at New York.

Join now for FREE unlimited access to Reuters.com

Register

Initial claims for state unemployment benefits fell from a seasonally adjusted 18,000 to 215,000 for the week ended Feb. 26, the lowest level since Jan. 1, the Labor Department said. Economists polled by Reuters had forecast 225,000 applications for the past week.

The second consecutive weekly drop in claims took them away from the 290,000 level in mid-January.

Unadjusted claims fell by 21,285 to 194,693 last week, led by sharp declines in California and Michigan, which offset an increase in filings in Massachusetts and Rhode Island.

With nearly 10.9 million record job vacancies at the end of December, companies are retaining their workers.

Claims could soon fall back below 200,000. They were last below that level in early December.

Claims fell from a record low of 6.149 million at the start of April 2020. The number of people receiving benefits after a first week of aid rose slightly from 2,000 to 1.476 million in the week ended 19 February. Tight labor market conditions are fueling wage growth, adding to inflationary pressures.

Federal Reserve Chairman Jerome Powell told lawmakers on Wednesday that “the labor market is extremely tight.”

Powell said he would support a 25 basis point interest rate hike at the U.S. central bank’s March 15-16 policy meeting and would be “ready to act more aggressively” if the inflation is not falling as quickly as expected. Read more

US stocks opened higher. The dollar appreciated against a basket of currencies. US Treasury yields fell.

DROP IN DISMISSALS

Although Russia’s war against Ukraine poses a risk to the labor market due to disruptions in supply chains, economists expect the labor market to recover all the jobs lost during the pandemic of COVID-19 this year. Oil, wheat and other commodity prices have soared, which will further fuel inflation.

Nonfarm payrolls likely rose by 400,000 jobs in February after rising by 467,000 in January, according to a Reuters survey of economists. The unemployment rate is expected to fall to 3.9% from 4.0% in January.

Expectations of a strong jobs report were bolstered by a separate report released Thursday by global job placement firm Challenger, Gray & Christmas showing that US-based employers announced 15,245 job cuts in February, down 20% from January. Layoffs are down 56% from a year ago.

The companies also announced plans to hire 215,127 workers last month, the largest February total since Challenger began tracking monthly hiring numbers in 2002. That’s up from the 77,630 jobs announced in January.

“The latest numbers are further proof that job creation is strong and employers are continuing to retain their workforce,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas. “Turnover in the job market comes from quits.”

The increase in expected hiring was led by retailers, with 114,118 jobs announced. Companies in the entertainment and leisure industry expected to add 22,369 jobs to the payroll. The government sector announced its intention to hire 17,266 workers. Employers in automotive industries expected to increase employment by 14,486.

Join now for FREE unlimited access to Reuters.com

Register

Reporting by Lucia Mutikani Editing by Chizu Nomiyama

Our standards: The Thomson Reuters Trust Principles.

About Jason Norton

Check Also

Asian stocks follow Wall St drop on inflation pressure

By JOE McDONALD, AP Business Writer BEIJING (AP) — Asian stock markets followed Wall Street …