It wasn’t a big drop, but it was a meaningful one.
The number of Americans applying for unemployment benefits fell to 202,000 for the week ending Jan. 6, according to statistics released Thursday by the Labor Department. That’s only a drop of 1,000 claims, but it did lower the total to its lowest level in almost three months.
The four-week average of claims ticked down by 250 to 207,750.
Weekly unemployment claims, a proxy for layoffs, have stayed at extraordinarily low levels in the face of high interest rates and elevated inflation. The number comes even in the face of a series of increases in interest rates from the Federal Reserve, which raised its benchmark rate 11 times since March 2022.
Inflation has eased considerably in the past year, but the Labor Department said Thursday that overall prices rose 0.3% from November and 3.4% from 12 months earlier, a sign that the Fed’s drive to slow inflation to its 2% target will likely remain a bumpy one, the Associated Press reported.
The Fed has left rates alone at its last three meetings and has signaled that it could cut rates three times this year.
The combination of decelerating inflation and low unemployment has raised hopes that the Fed is managing a so-called soft landing: raising rates just enough to bring down prices without causing a recession.
Overall, 1.83 million Americans were collecting jobless benefits during the week that ended Dec. 30, down by some 34,000 from the previous week.
