Fewer Americans applied for unemployment benefits last week, reflecting a low number of layoffs across the economy.
Jobless claims fell to 215,000 for the week ending February 26, down by 18,000 from the previous week, the Labor Department reported Thursday. It’s the lowest weekly level since mid-December, when the Omicron wave pushed up layoffs as businesses closed.
The four-week average for claims, which compensates for weekly volatility, fell by 6,000 to 230,500.
“Claims are headed back to the pre-Omicron lows in the wake of the collapse in cases and hospitalizations,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a research note. “Demand for discretionary services is rebounding strongly, easing the pressure on businesses hit hard by people’s retreat from social activity when the variant emerged.”
Nearly1.5 million Americans were collecting jobless aid the week that ended February 12, a small uptick of 2,000 from the previous week’s revised number.
First-time applications for jobless aid generally track the pace of layoffs, which are back down to fairly healthy pre-pandemic levels of between 200,000 and 250,000 a week.
“The latest numbers give more evidence that job creation is strong, and employers continue to hold fast to their workforces,” Andrew Challenger, senior vice president of the outplacement firm Challenger Gray & Christmas, said in a statement. A report from the firm on Thursday found that announced job cuts for February were 20% below January’s, while the number of planned hiring announcements for February was at its highest on record for that month.
The Labor Department releases its February jobs report on Friday. Economists expect it to show that U.S. employers added about 400,000 jobs last month.
In January, the U.S. economy added a whopping 467,000 jobs and revised December and November gains showed a combined increase of 709,000 jobs. The unemployment rate stands at 4%, a historically low figure.
The U.S. economy has rebounded strongly from 2020’s brief but intense coronavirus recession that tossed millions of Americans out of work and sent millions more to work from home rather than offices. Massive government spending and the vaccine rollout jumpstarted the economy as employers added a record 6.4 million jobs last year. The U.S. economy expanded 5.7% in 2021, growing last year at the fastest annual pace since a 7.2% surge in 1984, which also followed a recession.
Inflation is also at a 40-year high — 7.5% year-over-year — leading the Federal Reserve to ease its monetary support for the economy. The Fed has said it will begin a series of interest-rate hikes this month in an effort to tamp down surging prices.
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