The number of Americans submitting new jobless claims decreased somewhat last week, but there are still no indications that the recent financial market turmoil caused by the demise of two regional banks is having an effect on the economy.
The Labor Department said on Thursday that initial claims for state unemployment benefits decreased by 1,000 to a seasonally adjusted 191,000 for the week ending March 18. 197,000 claims were predicted by economists surveyed by Reuters for the most recent week.
Despite a wave of layoffs by significant technological businesses, claims have fluctuated within a small range this year and have remained quite low by historical norms.
In January, there were 1.9 job openings for every unemployed person, indicating that employers are typically reticent to fire employees.
Particularly in the wake of the failure of Silicon Valley Bank in California and Signature Bank in New York, economists anticipate an easing of labor market conditions. Due to tighter financial circumstances, banks may be less willing to extend credit, which might have an effect on households and small companies, the key drivers of job development.
The Federal Reserve acknowledged this when it increased its benchmark overnight interest rate by a quarter of a percentage point on Wednesday, but also signaled that it was about to stop further increases in borrowing costs.
Since last March, the U.S. central bank has increased its policy rate by 475 basis points, from nearly zero to the current range of 4.75%-5.00%.
“The events of the last two weeks are expected to result in some tightening of credit conditions for families and companies, and as a result impact on demand on the labor market and inflation,” Fed Chair Jerome Powell told reporters.
For the nonfarm payrolls section of the March jobs report, the government questioned commercial enterprises throughout the time period covered by the claims data.
Between the survey weeks in February and March, claims hardly changed. After adding 504,000 jobs in January, the economy added 311,000 in February.
Further information on the state of the labor market in March will be provided by data that will be released the following week on the number of persons getting benefits after receiving aid for the first week.
According to the claims data, the so-called ongoing claims rose 14,000 to 1.694 million during the week ended March 11. Continued claims are still relatively low, suggesting that some people who have been laid off may have no trouble finding new jobs.