The number of Americans filing new claims for jobless benefits edged higher last week but remained in a range that suggests the US job market remains tight, even as the Federal Reserve seeks to cool labor demand as part of its efforts to lower inflation.


Initial claims for state unemployment benefits rose 9,000 to a seasonally adjusted 225,000 for the week ended Dec. 24, the Labor Department reported on Thursday. Economists polled by Reuters had forecast 225,000 claims for the latest week.


The new numbers have been choppy in recent weeks but are well below the 270,000 threshold that economists see as a red flag for the labor market. A cluster of layoffs in the technology sector and interest-rate-sensitive industries such as housing have yet to leave a significant impact on claims as laid-off workers appear to be transitioning to new jobs relatively easily.


Federal Reserve Chairman Jerome Powell stated earlier this month that "it looks like we have a structural labor shortage out there."



Still, the resilience of the labor market is a key focus for Fed policymakers, as the U.S. economy has produced an average of 392,000 new jobs a month this year despite a rapid rate of increase and growing fears of a recession next year.


Officials see that strength as ample room for them to keep raising interest rates to lower inflation, which according to their preferred measure remains nearly three times their target level of 2% annually despite recently showing signs of heading lower.


The central bank has raised rates from near zero in March to the current range of 4.25% to 4.50% and Fed officials project it will surpass the 5% mark in 2023, a level not seen since 2007.


Economists believe that companies are likely to reduce hiring before starting layoffs. Employers are generally reluctant to lay off workers after struggling to find workers during the Covid-19 pandemic.


The claims report showed the number of people receiving benefits after the initial week of aid rose 41,000 to 1.710 million in the week ending December 17. Continuous claims, a proxy for hiring, have risen higher since early October, and the latest report is the first since February to show them reaching the trend level of 1.7-1.8 million that prevailed in the years before the pandemic. , a level seen at the time as a sign of a tight labor market.