Weekly jobless claims in the US fall despite the increase in layoffs in the technology sector

WASHINGTON (Reuters) – The number of Americans filing new jobless claims fell last week, showing that widespread layoffs remain low, keeping the job market taut despite the Federal Reserve’s aggressive interest rate hikes. cool demand in the economy.

Initial claims for state unemployment benefits fell by 4,000 to a seasonally adjusted 222,000 for the week ending Nov. 12, the Labor Department said Thursday. The previous week’s data was revised to show 1,000 more applications submitted than previously reported. Economists polled by Reuters had expected 225,000 complaints for the past week.

There has been an increase in layoffs in the tech sector, with Twitter, Amazon and Facebook’s parent Meta announcing thousands of job cuts this month. Firms in interest-rate-sensitive sectors like housing and finance are also laying off workers.

The layoffs so far have not been apparent in official data, with claims hovering in the middle of their 166,000-261,000 range this year.

Economists say businesses outside the technology and housing sectors are amassing workers after struggles to find work in the aftermath of the COVID-19 pandemic.

With 1.9 job vacancies for every unemployed person in September, some of the laid-off workers are likely finding new employment quickly. The wave of tech layoffs raised fears that a recession was imminent.

Goldman Sachs economists, however, dismissed that idea in a note this week. They argued that job opportunities in the tech sector remained well above their pre-pandemic level. They also noted that layoffs in the tech sector have not historically been a leading indicator of deteriorating labor markets in general.

“Announced tech job cuts have often increased without a corresponding increase in cuts in other industries and have otherwise been a random indicator,” they wrote.

The Fed raised its policy rate by 375 basis points this year, from near zero to a range of 3.75% to 4.00%, as it battles high inflation in what has become the fastest rate hikes since the 1980s. So far, the economy is weathering the stiffest storm of monetary policy, with Wednesday’s data showing strong growth in retail sales in October.

The claims data covered the week in which the government surveyed business establishments for the non-farm payrolls component of the November employment report. Claims increased marginally between the October and November survey periods.

Next week’s data on the number of people receiving benefits after a first week of aid will shed more light on November’s jobs report. So-called ongoing requests, a proxy for hiring, rose by 13,000 to 1.507 million in the week ending Nov. 5, the requests report showed.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

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