Unemployment benefit applications saw a slight increase last week, while the overall number of Americans receiving these benefits rose to its highest figure in over three years.
According to the Labor Department, jobless benefit applications grew by 6,000, reaching 223,000 for the week ending January 18, which was higher than the anticipated figure of 219,000.
Weekly applications serve as an indicator of layoffs occurring in the labor market.
For the week of January 11, the total of Americans on unemployment benefits increased by 46,000, bringing the total to 1.9 million, marking the highest level since November 2021.
This increase suggests that those receiving jobless benefits might be facing more challenges in securing new employment, which could indicate a drop in job demand, despite the economy’s relatively strong performance.
The four-week average for continuing claims is now about 100,000 higher than it was a year prior.
While there are signs of some labor market softening in 2024, job availability remains robust and layoffs are still historically low.
Earlier this month, it was reported that job creation surged in December, with an addition of 256,000 jobs and a slight decrease in the unemployment rate to 4.1%.
The last employment report of 2024 highlights that the economy and job hiring have maintained a strong pace, even with interest rates significantly elevated compared to pre-pandemic levels.
Consequently, there is less likelihood that the Federal Reserve will further reduce borrowing costs following three cuts issued late in 2024.
Overall, the healthy job statistics indicate that the economy is navigating into a post-COVID era characterized by steady growth, elevated interest rates, low unemployment, and a small rise in inflation levels.
Despite layoffs being at manageable levels throughout history, some prominent companies have recently announced job reductions.
Meta, the parent company of Facebook, declared earlier this month that it would be letting go of 5% of its workforce, while Brown-Forman, famous for producing Jack Daniel’s, revealed it would cut about 12% of its global employees.
Additionally, late in 2024, companies such as GM, Boeing, Cargill, and Stellantis all made announcements regarding layoffs.
