WASHINGTON — The number of Americans filing for jobless benefits fell last week, a sign that few businesses are shedding jobs despite high inflation and a weak economy.
Claims for jobless benefits for the week ending Sept. 24 fell by 16,000 to 193,000, the Labor Department reported Thursday. That is the lowest level of jobless claims since April. Last week’s number was revised down by 4,000 to 209,000.
Unemployment aid applications generally reflect layoffs. The current numbers are historically very low and suggest that Americans are benefiting from an unusually high level of job security. A year ago this week, 376,000 people applied for benefits.
The economy shrank in the first half of the year, the government said in a separate report Thursday on gross domestic product, the broadest measure of the economy’s output.
Yet employers, who have struggled to rehire after laying off 22 million workers at the height of the pandemic, are still looking to fill millions of open positions. There are currently about two job openings for every unemployed worker, close to an all-time high.
With companies desperate for workers, they are much more likely to keep their current staff.
Employers are also offering higher wages and benefits to attract and keep employees. Those higher wages are contributing to inflationary pressures.
The Federal Reserve aims to reduce inflation by rapidly raising its key interest rate, which is currently in a range of 3% to 3.25%. Just over six months ago, that rate was close to zero. Sharp rate increases have pushed up mortgage rates and other borrowing costs. The Fed expects higher interest rates to reduce borrowing and spending and bring inflation down toward its 2% target.
Fed officials are increasingly warning that the unemployment rate will likely have to rise as part of their fight against rising prices. If the number of jobless claims falls, as it did last week, it suggests the Fed may have to raise rates even more than it plans to slow the economy.