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U.S. weekly jobless claims decline further as labor market tightens -Breaking

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© Reuters. FILE PHOTO – People gather outside the newly opened career center in Louisville for appointments in person, U.S.A, April 15, 2021. REUTERS/Amira Karoud

By Lucia Mutikani

WASHINGTON (Reuters] – Last week saw a drop in the number of Americans applying for unemployment benefits. However, layoffs dropped sharply during February. These figures indicate that there was a labor market recovery.

Good news for Friday’s job report: Thursday’s upbeat reports are a good sign. Economists anticipate another month with solid job growth. The Omicron COVID-19 strain of infections is significantly reduced.

Christopher Rupkey is chief economist of FWDBONDS New York. He stated, “Jobless claim at a new lowest since Omicron signal a stronger employment report tomorrow which the labor market leaves its pandemic woes behind.”

The Labor Department reported that initial claims for state unemployment benefits fell 18,000 to 215,000, a seasonally adjusted level. This is the lowest number since January 1. Reuters polled economists and forecast that 225,000 applicants would apply for state unemployment benefits in the week ending February 26th.

Their weekly claims decline continued for the second week, pushing them farther away from the mid-January 290,000.

The number of unadjusted claim dropped from 212,85 to 194,693 in the last week. It was led by large declines in California, Michigan and Rhode Island, and offset by an increase in Massachusetts and Rhode Island filings.

Close to 10.9 million jobs were available at the December end, which is a record number. Companies have been able to retain their workforce.

The number of claims could fall to below 200,000. This level was last seen in December.

In April 2020, claims fell to 6.149million from an all-time high. In the week ending February 19, the number of individuals receiving benefits following an initial week’s aid increased by 2,000 to 1.47 million. Wage growth is being encouraged by tight labor markets, adding inflation pressures.

Jerome Powell (Federal Reserve Chair) told Congress on Wednesday, “The labor market is extremely tightly.”

Powell stated that he supports a 25-basis point interest rate increase at the U.S. central banks’ March 15-16 policy meetings and is “prepared to move further aggressively” in case inflation doesn’t fall as quickly as anticipated.

The U.S. stock market opened higher. A basket of currencies pushed the dollar higher. The yields on U.S. Treasury bonds fell.

TUMBER LAYOFFS

While Russia’s conflict with Ukraine presents a danger to the labor markets through supply chain disruptions, economists predict that this year’s COVID-19 epidemic will bring back all of the lost jobs. Inflation has been sparked by the escalating prices of wheat, oil and other commodities.

An economist survey by Reuters found that the nonfarm payrolls rose by 400,000 jobs in February, following an increase of 467,000 in January. From 4.0% in January, the unemployment rate will fall to 3.9%.

Expectations for a strong employment report were bolstered by a separate report on Thursday from global outplacement firm Challenger, Gray & Christmas showing U.S.-based employers announced 15,245 job cuts in February, down 20% from January. Layoffs decreased 56% when compared with a year earlier.

Challenger also reported that 215,127 employees were being hired by companies last month. This is the biggest February total since 2002, when Challenger began to track monthly hiring numbers. This is compared with the January announcement of 77,630 job openings.

“The latest numbers give more evidence that job creation is strong, and employers continue to hold fast to their workforces,” said Andrew Challenger, senior vice president at Challenger, Gray & Christmas. The labor market’s churn is caused by resignations.

Retailers led the increase in hiring plans with 114,118 jobs being announced. Companies in the entertainment/leisure industry planned to add 22,369 jobs to payrolls. Government sector plans to employ 17,266 employees. Automotive industry employers planned to boost employment by 14.486.

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