U.S. Unemployment Claims Fall

WASHINGTON (Reuters) – The number of Americans filing new applications for unemployment benefits decreased last week, indicating a stable labor market early in February.

Initial claims for state unemployment benefits fell by 7,000 to a seasonally adjusted 213,000 for the week ending February 8, as reported by the Labor Department on Thursday. Economists surveyed by Reuters had predicted 215,000 claims for the week.

Claims have shown a downward trend this year, reflecting historically low layoffs. This trend supports economic expansion, enabling the Federal Reserve to pause interest rate cuts while evaluating the effects of policies enacted during President Donald Trump’s administration. Trump’s initiatives—mass deportations of undocumented immigrants, tariffs on imports, and tax cuts—are seen as inflationary.

The U.S. central bank maintained its benchmark overnight interest rate in the range of 4.25%-4.50% last month, having reduced it by 100 basis points since September as part of its policy easing cycle. Previously, the policy rate was raised by 5.25 percentage points in 2022 and 2023 to combat inflation.

Although layoffs remain low, job opportunities for those who lose their jobs are not as plentiful as they were about a year ago, prompting businesses to adopt a wait-and-see approach.

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

Additionally, the number of people receiving benefits after an initial week of aid, which serves as a proxy for hiring, dropped by 36,000 to a seasonally adjusted 1.850 million during the week ending February 1, according to the claims report.