(MENAFN) Despite the Federal Reserve's efforts to combat inflation with higher interest rates, the U.S. labor market showed resilience as fewer Americans filed for unemployment benefits last week.
According to the Labor Department's report on Thursday, initial unemployment claims for the week ending April 20 decreased by 5,000 to 207,000, marking the lowest figure since mid-February. The four-week average, which smooths out weekly fluctuations, also declined by 1,250 to 213,250.
Unemployment claims serve as a key indicator of layoffs and provide insights into the direction of the job market. Despite the historic job losses during the pandemic in 2020, claims have consistently remained at low levels.
The Federal Reserve initiated a series of interest rate hikes starting in March 2022 to combat soaring inflation levels, reaching a four-decade high. By tightening monetary policy, the Fed aimed to alleviate inflationary pressures by curbing wage growth and fostering a more balanced labor market.
While concerns lingered that the rapid rate hikes could trigger a recession, the robust job market and strong consumer spending have mitigated these fears. In March, U.S. employers added a surprising 303,000 jobs, demonstrating the economy's resilience. Additionally, the unemployment rate dipped to 3.8 percent, maintaining its streak below 4 percent for 26 consecutive months, the longest period since the 1960s.
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