The number of Americans applying for jobless benefits rose slightly last week but remained at a historically low level despite high interest rates aimed at slowing hiring and the economy.
The Labor Department reported on Thursday that job claims rose by 2,000 to 205,000 for the week ended December 16. Overall, 1.87 million Americans were collecting unemployment benefits in the week ending Dec. 9, little changed from the previous week.
The Fed began raising interest rates last year to address rising inflation as a result of a strong and unexpected economic recovery from the Covid-19 recession in 2020. The Fed has raised interest rates 11 times since March 2022.
The policy began to show success. Consumer prices rose 3.1% from a year earlier, down from a four-decade high of 9.1% in June 2022 and still above the Fed's 2% target. The Fed has left rates steady at its last three meetings and now predicts that it will change policy and cut rates three times next year.
On the other hand, economic growth expanded at a seasonally adjusted annual rate of 4.9% in the third quarter of this year, the Bureau of Economic Analysis reported on Thursday in revised estimates. It is the strongest growth since the country's recovery from the pandemic.
Economic growth in the third quarter was reduced by 0.3 percentage points in the third and final GDP estimate from the previous estimate of 5.2%.
Strong growth in the third quarter showed underlying momentum in trade even as the Fed kept interest rates at their highest level in years.
