The number of Americans filing new claims for unemployment benefits fell last week, and there has been no sign yet that the recent financial market turmoil after the failure of two regional banks is having an impact on the economy.
The Labor Department said Thursday that initial claims for state unemployment benefits fell by 1,000 to a seasonally adjusted 192,000 for the week ending March 18. Economists polled by Reuters had expected 197,000 claims in the last week.
Claims have rebounded in a narrow range this year, remaining very low by historical standards, despite a rush of layoffs by big tech companies.
With 1.9 jobs available for every unemployed person in January, employers are generally reluctant to let go of workers.
Economists expect labor market conditions to ease, especially in the wake of the collapse of Silicon Valley Bank in California and Signature Bank in New York. Financial conditions have tightened, which could cause banks to be more stringent in extending credit, which could affect households and small businesses, which have been the main drivers of job growth.
That was acknowledged by the Federal Reserve, which on Wednesday raised its benchmark interest rate by a quarter of a percentage point, but signaled it was close to halting further increases in borrowing costs.
The US central bank has raised interest rates by 475 basis points since last March from a near zero level to the current range of 4.75%-5.00%.
Federal Reserve Chairman Jerome Powell told reporters that “the events of the past two weeks are likely to lead to some tightening of credit conditions for households and businesses, and thus impacting labor market demand and inflation.”
The claims data covered the period during which the government surveyed businesses for the non-farm payrolls portion of the March employment report.
Claims changed little between the survey weeks in February and March. The economy created 311,000 jobs in February after adding 504,000 jobs in January.
Data next week on the number of people receiving benefits after an initial week of assistance, a proxy for employment, will shed more light on the health of the labor market in March.
The claims report showed so-called continuing claims increasing 14,000 to 1.694 million during the week ending March 11th. Continuing claims remain very low, which indicates that some laid-off workers can easily find new work.
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