The New Normal: Slightly more Americans sought jobless aid last week
The number of Americans applying for jobless aid ticked up slightly last week but the total number of Americans collecting benefits remained at its lowest level in more than five decades.
Applications for unemployment benefits rose by 1,000 to 203,000 for the week ending May 7, the Labor Department reported Thursday. First-time applications generally track the number of layoffs.
The four-week average for claims, which evens out some of the weekly ups and downs, rose 4,250 from the previous week to 192,750.
The total number of Americans collecting jobless benefits for the week ending April 30 fell by 44,000 from the previous week to 1,343,000. That's the fewest since January 3, 1970.
American workers are enjoying historically strong job security two years after the coronavirus pandemic plunged the economy into a brief but devastating recession. Weekly applications for unemployment aid have been consistently below the pre-pandemic level of 225,000 for most of 2022, even as the overall economy contracted in the first quarter.
Last week, the government reported America’s employers added 428,000 jobs in April, leaving the unemployment rate at 3.6%, just above the lowest level in a half-century. Hiring gains have been strikingly consistent in the face of the worst inflation in four decades, with employers adding at least 400,000 jobs for 12 straight months.
Earlier this month, the Bureau of Labor Statistics reported that U.S. employers posted a record 11.5 million job openings in March - an unprecedented two job openings for every person who is unemployed. A record 4.5 million Americans quit their jobs in March - a sign that they are confident they can find better pay or improved working conditions elsewhere.
As hot as the job market is, inflation is even hotter. On Thursday, the government reported that U.S. producer prices soared 11% in April from a year earlier, a hefty gain that indicates high inflation will remain a burden for consumers and businesses in the months ahead.
On Wednesday, the government reported that inflation eased slightly in April after months of relentless increases but remained near a four-decade high. Consumer prices jumped 8.3% last month from a year ago, just below the 8.5% year-over-year surge in March, which was the highest since 1981.
Last week, the Federal Reserve intensified its fight against the worst inflation in 40 years by raising its benchmark short-term interest rate by a half-percentage point - its most aggressive move since 2000 - and signaling further large rate hikes to come. The increase in the Fed’s key rate raised it to a range of 0.75% to 1%, the highest point since the pandemic struck two years ago.
The Commerce Department reported last month that the U.S. economy shrank last quarter for the first time since the pandemic recession struck two years ago, contracting at a 1.4% annual rate, even as consumers and businesses kept spending in a sign of underlying resilience.