More Americans apply for unemployment benefits but layoffs still historically low

A hiring sign is displayed at a restaurant in Prospect Heights, Ill., Tuesday, April 4, 2023. On Friday, the U.S. government issues the March jobs report. (AP Photo/Nam Y. Huh)

The number of Americans filing for jobless benefits rose last week to the highest level in 11 weeks, though layoffs remain at historically low levels.

Applications for unemployment benefits climbed to 224,000 for the week ending Jan. 27, an increase of 9,000 from the previous week, the Labor Department reported Thursday.

The four-week average of claims, a less volatile measure, rose by 5,250, to 207,750.

Weekly unemployment claims are seen as a proxy for the number of U.S. layoffs in a given week. They have remained at extraordinarily low levels despite efforts by the U.S. Federal Reserve to cool the economy.

The Federal Reserve raised its benchmark rate 11 times beginning in March of 2022 in an effort to squelch the four-decade high inflation that took hold after an unusually strong economic rebound from the COVID-19 recession of 2020.

Though inflation has eased considerably in the past year, the Labor Department reported recently that overall prices rose 0.3 per cent from November to December and were up 3.4 per cent from 12 months earlier, a sign that the Fed’s drive to slow inflation to its two per cent target will likely remain a bumpy one.

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The Fed has left rates alone at its last four meetings.

As the Fed rapidly jacked up rates in 2022, most analysts predicted that the U.S. economy would tip into recession. But the economy and the job market remained surprisingly resilient, with the unemployment rate staying below four per cent for 23 straight months, the longest such streak since the 1960s.

The government issues its January jobs report on Friday.

Though layoffs remain at low levels, there has been an uptick in job cuts recently across technology and media. Google parent company Alphabet, eBay, TikTok and the Los Angeles Times have all recently announced layoffs.

Outside of tech and media, UPS, Macy's and Levi's also recently cut jobs.

Overall, 1.9 million Americans were collecting jobless benefits during the week that ended Jan. 20, an increase of 70,000 from the previous week. That's the most since mid-November.