US unemployment is at the lowest level in 4 months

• Unemployment claims are at their lowest level in 4 months.
• This is a good sign for employers and workers.
• This comes despite measures to curb inflation.

In the midst of an inflation crisis, there is good news for workers in the United States who were seeking relief from a difficult labor situation. Unemployment claims are at their lowest level in four months.

The Associated Press reported that the number of people filing for unemployment in the United States last week hit its lowest point in four months, a sign that employers are keeping their workers despite efforts by the Federal Reserve to slow the economy and control inflation.

Unemployment claims are at the lowest level in 4 months

U.S. jobless claims for the week ending Jan. 14 fell 15,000 to 190,000, down from 205,000 a week earlier, the Labor Department said Thursday. The four-week moving average for claims, which relaxes some of the week-to-week volatility, fell 6,500 to 206,000.

Jobless claims are generally seen as an indicator of layoffs, which have been relatively low since the pandemic wiped out millions of jobs in the spring of 2020, according to The Associated Press.

The labor market is closely monitored

The job market is closely monitored by the Fed, which raised interest rates seven times last year in an attempt to curb job growth and reduce stubbornly high inflation. Earlier this month, the government reported that American employers added a robust 223,000 jobs in December.

This is evidence that the economy remains healthy even as the Federal Reserve rapidly raises interest rates to slow economic growth and the pace of hiring. The unemployment rate has fallen to 3.5%, matching a 53-year low.

It was the smallest gain in two years and extended a slowdown in hiring

Although it was a solid report, the December jobs data suggested that the job market may be cooling in a way that could help the Fed combat high inflation. It was the smallest gain in two years and extended a slowdown in hiring that began last year. Average hourly wage growth slowed to its slowest pace in 16 months.

Similarly, the AP reported: “If these trends continue, we can feel increasingly confident that the strength of this labor market is sustainable,” said Nick Bunker, head of economic research at Indeed’s Hiring Lab.

US inflation is cooling from its summer peak

«The outlook for next year is uncertain, but many signs point to a smooth landing» rather than a feared recession, he added. Wall Street seemed encouraged by the report’s suggestion of a more moderate pay increase. The prices of stocks rose sharply on Friday morning.

And while the Fed’s higher rates have begun to cool the rate of inflation since its summer peak, they have also made mortgages, car loans and other consumer and business credit more expensive.