New unemployment claims improved more than expected last week, further reflecting a tight labor market and relatively low levels of firings and layoffs.
The Labor Department released its latest weekly jobless claims report Thursday at 8:30 a.m. ET. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:
Initial jobless claims, week ended March 12: 214,000 vs. 220,000 expected, 227,000 during the prior week
Continuing claims, week ended March 5: 1.419 million vs. 1.480 million expected, 1.494 million during the prior week
Jobless claims came in below 250,000 for a seventh consecutive week and hovered around pre-pandemic levels. And at 214,000, initial claims were at their lowest level of 2022.
Continuing claims, which track the total number of individuals claiming benefits across regular state programs, have held well below levels from even before the pandemic, coming in under 1.5 million for four consecutive weeks now. Throughout 2019, continuing claims averaged around 1.7 million per week.
The labor market has remained a bright spot in the U.S. economy, especially as a brief hit from the Omicron variant earlier this year unwound further in the most recent economic data.
Taken together, the weekly jobless claims data, monthly jobs reports, and other surveys have shown an economy with near-record levels of job openings and a labor force participation rate that has steadily begun to creep back toward pre-virus standards.
However, with inflation running at a 40-year high, many economists have begun to wonder when rising prices ultimately begin to meaningfully dent demand — and in turn, weigh on employers' desires to bring back more labor.
"Staggeringly high inflation is set to go higher in forthcoming reports because of impacts from Russia’s invasion of Ukraine and continuing supply chain disruptions including in China," Mark Hamrick, senior economic analyst at Bankrate, wrote in an email. "These higher costs crimping household budgets risk dampening consumer discretionary purchases. It remains to be seen how much this could negatively affect the job market in the months to come."
For now, however, the job market has remained robust — and key policymakers have also taken note. Members of the Federal Open Market Committee on Wednesday opted to raise interest rates for the first time since 2018, kicking off a process of dialing back monetary policies that had been kept supportive over the course of the pandemic to help prop up the virus-stricken economy.
And in explaining this decision and the Fed's likely path toward multiple additional rate hikes later this year, Federal Reserve Chair Jerome Powell highlighted the strength of the labor market in particular. He maintained that the economy in its current form would be able to withstand a less accommodative tilt from the central bank.
"If you take a look at today's labor market, what you have is 1.7+ job openings for every unemployed person. So that is a very, very tight labor market — tight to an unhealthy level, I would say," Powell said during his press conference Wednesday afternoon. "We're hearing from companies that they can't hire enough people, they're having a hard time hiring. "
"Across the economy, we'd like to slow demand so that it's better aligned with supply," Powell added. "That overtime should bring inflation down."