Macro Matters

4 minute read • February 2, 202310:07 AM EST • Last Updated 20 min ago

U.S. weekly jobless claims at nine-month low; productivity accelerates

By Lucia Mutikani

Summary
• Weekly jobless claims drop 3,000 to 183,000
• Continuing claims decrease 11,000 to 1.655 million
• Productivity accelerates at 3.0% rate in fourth quarter
• Unit labor costs grow at 1.1% pace

WASHINGTON, Feb 2 (Reuters) - The number of Americans filing new claims for unemployment benefits dropped to a nine-month low last week as the labor market remains resilient despite higher borrowing costs and mounting fears of a recession this year.

The surprise decline in weekly jobless claims reported by the Labor Department on Thursday raised cautious optimism that the anticipated downturn will be shallow and short. Federal Reserve Chair Jerome Powell told reporters on Wednesday that "the economy can return to 2% inflation without a really significant downturn or a really big increase in unemployment."

"Layoffs remain low and demand for workers is still strong," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York. "The labor market has yet to respond meaningfully to a rapid increase in interest rates." Initial claims for state unemployment benefits dropped 3,000 to a seasonally adjusted 183,000 for the week ended Jan. 28, the lowest level since April 2022. It was the third straight weekly decline in applications. Economists polled by Reuters had forecast 200,000 claims for the latest week.

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Claims have been running low this year, consistent with a persistently tight labor market. The government reported on Wednesday that there were 11 million job openings at the end of December, with 1.9 openings for every unemployed person.

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