US saw more applications for unemployment benefits last week, despite historically low layoffs

The number of Americans applying for unemployment benefits spiked last week, though the job market is majorly healthy, with layoffs reduced to a historic low.
According to the labour department, applications for jobless benefits increased by 14,000 for the week ending 11 January, against 203,000 in the previous week. This marked the lowest number since February last year.
The four-week moving average, which smooths out weekly volatility, dipped slightly by 750 to 212,750, indicating stability.

Meanwhile, the overall figure of Americans receiving unemployment benefits for the week ending 4 January fell by 18,000 to 1.86 million.
Weekly jobless claims serve as a key indicator of layoffs, and despite this rise, the broader labour market remains strong.
In December, the labour department reported a surge in job growth, with employers adding 256,000 positions. The unemployment rate also ticked down to 4.1 per cent, reflecting sustained hiring momentum.
The final job reports of 2024 showcase that the US economy appears to be shifting into a post-pandemic phase characterised by steady growth, elevated borrowing costs, low unemployment, and moderately higher inflation.
In another positive sign, the government reported that US job openings rose unexpectedly in November to 8.1 million, up from 7.8 million in October, marking the highest figure since February. This suggests that companies remain eager to hire, even as the labour market shows signs of loosening.
Though layoffs fall into a healthy category by historical standards, several high-profile companies have followed the job-cutting trend in the past few months.
This week, Meta, Facebook’s parent company, revealed plans to cut 5 per cent of its workforce, while Jack Daniel’s maker, Brown-Forman, announced a 12 per cent reduction in its global staff.
Earlier, late in 2024, corporate giants such as GM, Boeing, Cargill, and Stellantis also revealed their plans for job cuts. Despite these isolated announcements, layoffs overall remain low by historical standards, underscoring the resilience of the US job market.
This labour market data might be used by the federal reserve to guide its monetary policy decisions, with less pressure to reduce interest rates further in the near future.