"Though the Federal Reserve opted to leave its benchmark borrowing rate alone this week, it is well into the second year of its battle to stamp out four-decade high inflation. The whopping 11 interest rate hikes since March of last year have helped to curb price growth, but the U.S. economy and labor market have held up better than most expected.
Earlier this month, the government reported that U.S. employers added a healthy 187,000 jobs in August. Though the unemployment rate ticked up to 3.8%, it’s still low by historical measures."
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US applications for unemployment benefits fell to their lowest level in eight months last week, dropping to 201,000. This indicates layoffs decreased and the labor market remains strong despite interest rate hikes aimed at reducing inflation. The lower figure represents the fewest jobless claims since late January. Additionally, the four-week moving average declined by 7,750 to 217,000. While the Fed did not raise rates this week, it has enacted 11 hikes since March 2021. Despite these rate increases, the economy and job market have held up better than expected according to recent data showing healthy job growth and declining but still robust job openings. While some layoffs occurred mainly in technology, businesses have largely tried to retain employees as demand remains high.
Overall, the number of people collecting unemployment benefits decreased by 21,000 to 1.66 million for the week ending September 9th.
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