The number of Americans who filed for unemployment insurance last week fell to its lowest level in seven months and the job market appears to be defying higher interest rates introduced to curb hiring.
The Labor Department reported Thursday that unemployment insurance claims in the United States fell by 13,000 to 216,000 in the week ended Sept. 2. This is the lowest level since February.
Jobless claims are used as an indicator of the number of layoffs in a given week.
The Federal Reserve has hiked interest rates 11 times to 5.4%, the highest level in 22 years, in the second year of its fight against inflation.
The Federal Reserve’s interest rate hikes are aimed at cooling the labor market and lowering wages, which many economists say are holding back price growth. Although some indicators of inflation have fallen sharply — from as high as 9% to around 3% — since the Fed began raising rates, the job market has held up better than many expected.
Last week, the government reported that US employers added 187,000 jobs in August, another sign of a healthy job market. The unemployment rate rose to 3.8%, which is still low by historical standards.
The US economy has added an average of about 236,000 new jobs per month this year, which is less than the pandemic surge of the previous two years but still a solid number.
Latest government data also showed that job vacancies fell to 8.8 million in July, the lowest since March 2021 and from 9.2 million in June. However, the numbers are still unusually high considering monthly job postings never exceeded 8 million prior to 2021.
