U.S. lawmakers expressed concern that progressive rate hikes from the Federal Reserve would lead to widespread job losses. Though higher than year-ago levels, labor seems to be holding up. File photo by Ken Cedeno/UPI
U.S. Federal Reserve Chair Jerome Powell raised interest rates again, though hiring remains strong against a background of concerns triggered by recent woes in the finance sector. Pool photo by Jonathan Ernst/UPI
March 23 (UPI) — The number of people filing first-time claims for unemployment insurance barely moved from week ago levels, U.S. data show, suggesting recent monetary concerns have yet to show up in the labor market.
The U.S. Labor Department reported that initial claims for the week ending March 18 declined by 1,000 from the previous week to reach 191,000 claims. The less-volatile, four-week moving average showed a decrease of 250 from last week’s unrevised level of 196,500.
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A strong labor market compounds the challenge for the U.S. Federal Reserve, which is trying to arrest consumer-level inflation without steering the economy toward a broader recession that would be marked by widespread layoffs.
The global financial sector is on edge following the collapse of Silicon Valley Bank in California and the bailout of struggling Credit Suisse by Swiss investment bank UBS. U.S. Federal Reserve Chairman Jerome Powell nodded to banking concerns, but opted nonetheless to raise interest rates by another 0.25 percentage point, or 25 basis points.
That was a concern on Capitol Hill. Rep. Ayana Pressley, a Democrat representing Massachusetts, who told Politico she was concerned about the resilience of the U.S. economy.
The Fed “has so far refused to pause interest rate hikes despite the risk of millions of job losses and the disparate impact they would have on our most vulnerable,” she said.
Federal data show first-time claims are higher year-on-year, with claims closer to 166,000 during the similar week in March 2022. For the week ending March 4, however, claims were higher at 212,000.
New York brokerage OANDA said in a research note emailed Thursday to UPI that the labor market has yet to respond to progressive rate hikes from the U.S. Fed.
“The consensus view is that the labor market is going to weaken in the spring,” the note read. “Well, it is now spring and the last weekly reading for the winter posted another surprise decline.”
Without any meaningful indications that hiring is slowing down, OANDA expects the Fed will make another rate hike when it meets again in early May.
