US weekly jobless claims decline amid stable labor market

The number of Americans filing new applications for unemployment benefits decreased last week, suggesting the labor market remained stable early in February.

Initial claims for state unemployment benefits fell 7,000 to a seasonally adjusted 213,000 for the week ended February 8, the Labor Department said on Thursday. Economists polled by Reuters had forecast 215,000 claims for the latest week.

Claims have trended lower so far this year, consistent with historically low layoffs. That is helping to underpin the economic expansion, allowing the Federal Reserve to pause interest rate cuts while it assesses the impact of policies by President Donald Trump’s administration. Economists view Trump’s push for mass deportations of undocumented immigrants, tariffs on imports and tax cuts as inflationary.

The US central bank left its benchmark overnight interest rate unchanged in the 4.25%-4.50% range last month, having reduced it by 100 basis points since September, when it embarked on its policy easing cycle. The policy rate was hiked by 5.25 percentage points in 2022 and 2023 to tame inflation.

Despite low layoffs, employment opportunities for those who lose their jobs are no longer as abundant as they were a year or so ago, with businesses adopting a wait and see attitude.

Nonfarm payrolls increased by 143,000 jobs in January, while the unemployment rate was at 4.0%.

The number of people receiving benefits after an initial week of aid, a proxy for hiring, declined 36,000 to a seasonally adjusted 1.850 million during the week ending February 1, the claims report showed.