U.S. weekly jobless claims unexpectedly fall

POINTS

:pushpin: Initial claims for state unemployment benefits dropped 15,000 to a seasonally adjusted 190,000 for the week ended Jan. 14, the Labor Department said on Thursday.

:pushpin: Economists polled by Reuters had forecast 214,000 claims for the latest week.

:pushpin: Claims have remained at levels consistent with a tight labor market, even as layoffs have accelerated in the technology industry and interest rate-sensitive sectors like finance and housing.

Microsoft said on Wednesday it would eliminate 10,000 jobs, joining cloud-computing rival Amazon.com, which this month started notifying employees of its own 18,000-person job cuts. Economists cautioned against reading the technology layoffs as flagging a deterioration in labor market conditions, arguing that these companies were right-sizing after over-hiring during the Covid-19 pandemic.

β€œThe tech sector is just getting back to where they were in 2020 or 2021, which I don’t think is a bad situation,” said John Blevins, a guest lecturer at Cornell’s SC Johnson College of Business. β€œIt’s still a huge workforce. These people being let go at these major tech firms will get new replacement jobs almost immediately.”

Outside the technology industry, economists say companies are generally reluctant to send workers home after difficulties finding labor during the pandemic. They expect companies to cut back on hiring before resorting to layoffs.

1 Like