World News | U.S. jobless claims fall slightly as labor market remains tight

WASHINGTON, March 23 (AP) — The labor market continued to defy the Federal Reserve’s attempt to cool hiring, with U.S. jobless claims falling again last week and remaining at record lows.

Initial claims for state unemployment benefits fell 1,000 to 191,000 in the week ended March 18 from the previous week, the Labor Department said on Thursday.

Read also | How digitization can improve remittances to Africa.

The four-week moving average of initial jobless claims fell 250 to 196,250 last week, staying below the 200,000 threshold for the ninth straight week, flattening weekly swings.

Claims for unemployment benefits are seen as a barometer of layoffs in the United States.

Read also | The Bank of England may raise interest rates after a sharp rise in food prices.

The Federal Reserve extended its year-long fight against high inflation on Wednesday by raising its key interest rate by 25 basis points, despite concerns that higher borrowing rates could exacerbate turmoil plaguing the banking system.

Federal Reserve Chairman Jerome Powell emphasized that the central bank remains focused on fighting high inflation, which may require further rate hikes.

But he also said the Fed may not need to implement a series of rate hikes if more banks are to reduce lending to preserve cash. That could slow the economy, hiring and inflation, Powell said.

The Fed’s interest rate hikes are aimed at cooling the economy, labor market and wages, thereby keeping prices under control. But so far, these things have not happened the way the central bank had hoped.

Inflation is still more than double the Fed’s 2% target, and the economy is growing and adding jobs at a healthy rate.

Last month, the government reported that employers added 311,000 jobs in February, down from a huge gain in January but enough to keep pressure on the Federal Reserve to aggressively raise interest rates to fight inflation. The unemployment rate rose to 3.6% from a 53-year low of 3.4%.

In its latest quarterly forecast, the Fed predicted that the unemployment rate, historically associated with recessions, will rise to 4.5% by year-end from 3.6% currently.

While the U.S. labor market remains strong, layoffs in the tech industry have been on the rise, with many companies on a hiring spree during the pandemic. IBM, Microsoft, Salesforce, Twitter and DoorDash have all announced layoffs in recent months.

Amazon said this week that it would cut another 9,000 jobs, while the tech giant said it would cut 18,000 workers in January.

Last week, Facebook parent Meta said it would cut 10,000 jobs, in addition to the 11,000 it cut in November.

The real estate sector is the most affected by the Fed’s rate hikes. Higher mortgage rates — which have risen again to near 7 percent in recent weeks — slowed home sales for a 12-month streak before rising 14.5 percent in February.

Some 1.69 million people received unemployment benefits in the week ended March 11, an increase of 14,000 from the previous week. That number is close to pre-pandemic levels. (Associated Press)

(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)