WASHINGTON (`) – The number of people filing for unemployment benefits rose only slightly last week as the job market remains strong despite efforts by the Federal Reserve to cool the economy and hire new workers.
Jobless claims for the week ended December 24 rose 9,000 to 225,000, the Labor Department reported Thursday. The four-week average of applications, which smooths out some week-to-week fluctuations, fell just 250 to 221,000.
SEE: Which means a mix of high inflation and low unemployment for the US economy
Jobless claims are an indicator of layoffs and are closely watched by economists as the Fed has been quick to raise interest rates in a bid to curb job growth and inflation. If the Fed’s rate hikes trigger a recession, as many economists fear, a spike in layoffs and jobless claims would be an early sign.
So far, the number of jobless claims has been fairly low, evidence that Americans enjoy a high level of job security. Thousands of workers with temporary jobs during the winter holidays will lose their jobs in the coming weeks and apply for unemployment benefits. The government tries to seasonally adjust the data to account for these job losses, but the adjustments aren’t always perfect and layoffs of temp workers could skew the data.
The Fed is keen to slow job growth and the pace of wage increases as part of its effort to fight inflation. The central bank has hiked interest rates seven times this year, making it more expensive for consumers to take out mortgage and auto loans and raising credit card lending rates.
So far, rate hikes have taken mortgage rates to over 6%, essentially double what they were before the Fed began tightening credit. Higher mortgage rates have hit the housing market, with existing home sales falling for 10 straight months.
So far, however, this has had a limited impact on recruitment. Employers added 263,000 jobs in November, a decent gain, and the unemployment rate stayed at a low 3.7%.
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