Noha Makram – Live- The number of Americans filing for unemployment benefits fell more than expected last week, indicating underlying labor market strength despite a recent rise in layoffs.
Initial unemployment claims fell by 9,000 to a seasonally adjusted 218,000 during the week ending February 3, the Labor Department announced Thursday.
Economists in a Reuters poll had expected unemployment benefits to reach 220,000.
Unemployment benefits have not changed much from last year, despite the recent increase in employee layoffs, especially in the technology and media sectors.
Employers fear abandoning employees after the difficulties they faced in finding workers during and after the Covid-19 pandemic. Economists also pointed to higher worker productivity, declining labor costs and other factors that encourage companies to retain their employees.
Last week, the government announced that non-farm payrolls rose by 353,000 jobs in January and the unemployment rate stabilized at 3.7%.
The strength of the labor market prompted financial markets to reduce their expectations for the first rate cut and adjust it to be in May instead of March. Markets are anticipating a 20% Fed rate cut in March, a significant decrease from the beginning of the year, and a 60% forecast for a 25 basis point rate cut in May, according to the CME FeedWatch tool.
Yesterday, Wednesday, US Federal Reserve officials indicated that they would not be in a hurry to cut interest rates until they were sure that inflation would decline sustainably to its target of 2%.
It is worth noting that the Federal Reserve has raised interest rates by 525 basis points since March 2022 to its current range, which ranges between 5.25% and 5.50%.
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2024-02-08 15:02:59
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