Jobless claims in the US fall despite mass layoffs at Twitter, Amazon and Meta

The number of Americans who filed new unemployment benefits applications fell last week, showing that widespread layoffs remain low, keeping the labor market tight despite the Federal Reserve’s aggressive interest rate hikes to cool demand in the economy.

Initial applications for state benefits for unemployment they were down 4,000, to a seasonally adjusted 222,000 for the week ending Nov. 12, the Labor Department said Thursday.

Data from the previous week was revised to show 1,000 more applications filed than previously reported. Economists polled by Reuters had forecast 225,000 applications for the past week.

There has been a spike in layoffs in the tech sector, with Twitter, Amazon and Facebook parent Meta announcing thousands of job cuts this month. Companies in rate-sensitive sectors such as housing and finance are also laying off workers.

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

Economists say companies outside the technology and housing sectors are hoarding workers after difficulties finding labor in the wake of the COVID-19 pandemic.

With 1.9 stalls vacant For every person unemployed in September, some of the laid-off workers are probably finding new jobs quickly. The rise in technology layoffs has raised fears that a recession is imminent.

Goldman Sachs economists, however, dismissed this notion in a note this week. They argued that tech job openings remained well above their pre-pandemic level. They also noted that layoffs in the tech sector have historically not been a strong indicator of deterioration in the broader labor market.

“Los tech job cuts announced have often soared without a corresponding increase in cuts in other sectors and have otherwise been a coincidental indicator,” they wrote.

The Fed has raised its policy rate by 375 basis points this year, from near zero to a range of 3.75% to 4% while battling high inflation, in what has become the fastest rate hike cycle since the 80s.

So far, the economy is weathering the storm of tighter monetary policy, and data on Wednesday showed strong growth in retail sales in October.

The claims data covered the week during which the government surveyed business establishments for the nonfarm payrolls component of the November employment report. Orders increased marginally between the October and November survey periods.

Data next week on the number of people receiving benefits after an initial week of aid will shed more light on the employment report of November. So-called continuing applications, a proxy indicator of hiring, rose 13,000 to 1.507 million in the week ending Nov. 5, the report showed.