Jobless claims for last week in the US still on lower side, hints strong labor market
The Labor Department announced on Thursday that initial jobless claims, which serve as a gauge for layoffs, fell by 2,000 to a seasonally adjusted 190,000 in the previous week in the U.S.
Despite the significant job losses announced by large technology, finance, and other companies, jobless claims have stayed low for several months.
General Motors, Cerebral, Meta Platforms, Alphabet, and Microsoft are among the companies that have recently laid off employees. These cuts may not be reflected in the jobless claims data since workers could decline assistance due to generous severance packages or quickly find employment in a tight labor market.
Employers added over half a million jobs in January, and the unemployment rate dropped to its lowest level since 1969 at 3.4%. Boyd Nash-Stacey, principal economist at Prevedere Inc., believes that even though the labor market remains strong, the increase in unemployment claims might not be as pronounced as in past business cycles due to labor supply challenges.
On Thursday, the Labor Department released a separate report indicating a downward revision to its estimate of worker productivity. According to the revised data, labor productivity increased at a seasonally adjusted annual rate of 1.7% during the fourth quarter, as opposed to the previously estimated 3%. This change reflects a downward adjustment to economic output and an upward adjustment to the number of hours worked.