The number of Americans filing new claims for unemployment benefits fell more than expected last week, indicating continued strength in the labor market, although turmoil in financial markets cast a shadow over the economy.
Initial claims for state unemployment benefits fell by 20,000 to a seasonally adjusted 192,000 for the week ended March 11, the Labor Department said Thursday. Economists polled by Reuters had forecast 205,000 claims for the past week.
Although big tech companies have cut jobs, the labor market has remained resilient, with employers generally reluctant to lay off workers after struggling to find work during the COVID-19 pandemic.
Tensions in the labor market, marked by 1.9 job creations for every unemployed person in January, as well as stubbornly high inflation argue for the Federal Reserve to continue raising interest rates next week.
But the recent collapse of two regional banks has sparked fears of contagion in the banking sector, hurting the stock market and darkening the outlook for the economy.
Financial markets have oscillated between raising the Fed’s rates by a quarter point and suspending its monetary policy tightening campaign when policymakers meet next Tuesday and Wednesday, according to the CME Group’s FedWatch tool. .
As recently as last week, they were betting on a 50 basis point rate hike. Those expectations were cut to a quarter of a point after the government announced the economy added 311,000 jobs in February, but with a slowdown in wage gains and the unemployment rate rising to 3.6% from 3.4 % in January.
The central bank has raised its benchmark overnight interest rate by 450 basis points since last March, taking it from near zero to the current range of 4.50% to 4.75%.
The claims report also showed the number of people receiving benefits after a first week of help, a proxy indicator of employment, fell by 29,000 to 1.684 million in the week ending March 4. . So-called continuing claims remain low, suggesting that some laid-off workers could easily find new work.