Low rate of U.S. layoffs reflect strongest labor market in decades
The numbers: The rate of layoffs as measured by U.S. jobless claims rose sharply in early March, just one week after dropping to the lowest level since 1969.
Initial U.S. jobless claims rose by 21,000 to 231,000 in the seven days ended March 3, the government said Thursday. That’s the highest level in six weeks.
Economists surveyed by MarketWatch had forecast claims to total 220,000.
The more stable monthly average of claims edged up 2,000 to 222,500, but it’s just slightly above a 50-year low.
The number of people already collecting unemployment benefits, known as continuing claims, fell by 65,000 to 1.87 million.
What happened: Jobless claims are a bit herky-jerky in February because of winter weather and other seasonal quirks, but the latest swing doesn’t alter the picture of a vibrant employment scene.
Layoffs have been falling for years and have touched levels last seen in 1969. Job openings are high, unemployment is a low 4.1% and the labor market is hotter now than it’s been in about two decades.
In February, the U.S. likely added 220,000 new jobs, with the unemployment rate dipping to 4%, economists surveyed by MarketWatch forecast. The government will issue the February employment report on Friday morning.
Big picture: An economic expansion that’s almost nine years old has put millions of Americans back to work after the Great Recession. The unemployment rate is likely to dip below 4% soon for the first time since the end of 2000. Some workers are even starting to get better pay after years of sluggish wage gains.
The good news is starting to be a bit too much for investors, however. They worry that a tight labor market will drive wages and inflation higher.
If that happens, the Federal Reserve will raise U.S. interest rates more aggressively, an outcome that could slow the economy and hurt stocks and bonds.
Market reaction: The Dow Jones Industrial Average DJIA, -0.33% were set to open mildly higher in Thursday trades. The Dow has surged 35% from the election day.
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