US applications for jobless benefits rise, but layoffs remain at historically low levels

More Americans filed jobless benefits last week but layoffs remain at historically low levels despite elevated interest rates and a flurry of job cuts in the media and technology sectors.

Applications for unemployment benefits rose to 214,000 for the week ending Jan. 20, an increase of 25,000 from the previous week, the Labor Department reported Thursday.

The four-week average of claims, a less volatile measure, fell by 1,500 to 202,250.

Weekly unemployment claims are viewed as representative for the number of U.S. layoffs in a given week. They have remained at extraordinarily low levels despite high interest rates and elevated inflation.

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Though layoffs remain at low levels, there has been an uptick in job cuts recently across technology and media.

San Jose, California-based eBay is the latest tech company to roll out a series of layoffs after quickly ramping up hiring during the COVID-19 pandemic while people spent more time and money online. The online auction site said Tuesday that it is laying off 1,000 workers.

This month, Google said it was laying off hundreds of employees working on its hardware, voice assistance and engineering teams, while TikTok said its shedding dozens of workers in ads and sales and video game developer Riot Games was trimming 11% of its staff.

Amazon said this month that it’s cutting several hundred jobs in its Prime Video and MGM Studios unit.

On Tuesday, the Los Angeles Times said it was cutting 20% of its newsroom, at least 115 employees.

Layoffs and buyouts have hit a wide swath of the news industry over the past year. The Washington Post, NPR, CNN and Vox Media are among the many companies hit.

An estimated 2,681 news industry jobs were lost through the end of November.

The Federal Reserve raised its benchmark rate 11 times beginning in March of 2022 in an effort to squelch the four-decade high inflation that took hold after an unusually strong economic rebound from the COVID-19 recession of 2020.

Though inflation has eased considerably in the past year, the Labor Department reported recently that overall prices rose 0.3% from November and 3.4% from 12 months earlier, a sign that the Fed’s drive to slow inflation to its 2% target will likely remain a bumpy one.

The Fed has left rates alone at its last three meetings and most economists are forecasting multiple rate cuts this year.

As the Fed rapidly jacked up rates in 2022, most analysts predicted that the U.S. economy would tip into recession. But the economy and the job market remained surprisingly resilient, with the unemployment rate staying below 4% for 23 straight months, the longest such streak since the 1960s.

Overall, 1.83 million Americans were collecting jobless benefits during the week that ended Jan. 13, an increase of 27,000 from the previous week.