The number of Americans filing for unemployment benefits increased last week, although layoffs overall remain at historically low levels and the job market is generally robust. According to the Labor Department’s report on Thursday, applications for jobless benefits rose by 14,000 for the week ending January 11, up from the previous week’s figure of 203,000, which was the lowest since February of the previous year. The four-week average of claims, which helps to smooth out some of the week-to-week fluctuations, decreased by 750 to 212,750.
In contrast, the total number of Americans receiving unemployment benefits for the week of January 4 dropped by 18,000 to 1.86 million. Weekly applications for jobless benefits are often viewed as a barometer for layoffs in the labor market. While there were some signs of weakness in 2024, job opportunities remain plentiful and layoffs are at historically low levels.
Last week, the Labor Department announced that job growth in December saw a significant surge while the unemployment rate decreased. Employers added 256,000 jobs in the last month, resulting in the unemployment rate ticking down to 4.1%. The final employment report of 2024 highlights the economy’s ability to maintain solid growth in hiring despite interest rates being considerably higher than pre-pandemic levels. Consequently, the Federal Reserve may be less inclined to reduce borrowing costs further in the upcoming months after implementing three cuts in late 2024.
The robust employment figures indicate that the economy is transitioning into a period of sustained growth post-COVID, characterized by higher interest rates, low unemployment rates, and slightly elevated inflation. Additionally, the government revealed an unexpected increase in U.S. job openings in November, signaling that companies are actively seeking workers despite a more relaxed labor market. Job openings rose to 8.1 million in November, marking the highest level since February and an increase from 7.8 million in October.
