The number of Americans filing new claims for unemployment benefits fell more than expected last week, indicating continued strength in the labor market, even as financial market turmoil cast a shadow over the economy.
Initial claims for state jobless benefits fell 20,000 to a seasonally adjusted 192,000 for the week ended March 11, the Labor Department reported on Thursday. Economists polled by Reuters had forecast 205,000 claims for the latest week.
Even as major tech companies cut jobs, the labor market remains resilient, with employers generally reluctant to lay off workers after struggling to find workers during the COVID-19 pandemic.
A strengthening labor market, marked by 1.9 job openings for every unemployed person in January, along with very high inflation. These two factors make the Fed divided in raising interest rates.
But the recent collapse of two regional banks has sparked fears of contagion in the banking sector, weighing on stock markets and undermining the economic outlook.
Financial markets have been reeling between the Fed raising rates by a quarter point and halting its monetary policy tightening campaign with policymakers due to meet next Tuesday and Wednesday.
Last week, market players were betting on a rate hike of 50 basis points. That expectation was scaled back after the government reported the economy added 311,000 jobs in February, but with wage growth slowing and the unemployment rate rising to 3.6% from 3.4% in January.
U.S. central bank has raised its benchmark overnight interest rate by 450 basis points since last March from near zero to the current 4.50%-4.75% range.
The claims report also showed the number of people receiving benefits after the initial week of aid, a proxy for hiring, fell 29,000 to 1.684 million in the week ended March 4. So-called continuous claims remain low, indicating some laid-off workers can easily find new jobs.
