The number of Americans seeking unemployment benefits increased last week, though the labor market continues to show resilience and layoffs remain relatively low.
According to the Labor Department, U.S. applications for jobless benefits rose by 11,000, reaching 219,000 for the week ending February 1. This figure was higher than analysts’ expectations, who had predicted 213,000 new applications.
Unemployment benefit applications are often seen as an indicator of layoffs in the economy.
The four-week average, which accounts for some fluctuations in weekly data, saw an uptick of 4,000, bringing it to 216,750.
Despite some minor indications of weakness in the labor market observed last year, jobs continue to be abundant with layoffs remaining at historically low levels.
The Labor Department’s report from last month highlighted a significant job growth surge in December, with unemployment figures decreasing. Employers added 256,000 jobs in December, and the unemployment rate fell to 4.1%.
The final jobs report for 2024 indicated that the economy was able to maintain a solid job growth pace despite the much higher interest rates compared to pre-pandemic times.
The release of January’s employment data is anticipated on Friday. Economists polled by FactSet speculate that U.S. employers are expected to have added around 170,000 jobs in January 2025, which, while lower than December’s figures, still reflects a healthy job market.
As anticipated, the Federal Reserve left its benchmark interest rate unchanged last week, following three rate cuts in late 2024. Federal officials are closely monitoring inflation and labor market conditions for potential signs of an economic slowdown. They have revised their expectation for rate cuts this year down to two, compared to the earlier prediction of four cuts.
In general, although layoffs are low in a historical context, several companies have already announced workforce reductions this year.
Notable organizations such as Workday, Dow, CNN, Starbucks, and Meta, the parent company of Facebook, have all made cuts to their employee numbers in 2025.
Additionally, significant layoffs were reported late last year by companies like GM, Boeing, Cargill, and Stellantis.
As of the week ending January 25, the total number of Americans receiving unemployment benefits rose to 1.89 million, marking an increase of 36,000 from the prior week.
