Americans breathed a collective sigh of relief last week as the number of people filing new claims for unemployment dropped to a nine-month low. Despite higher borrowing costs and deepening anxiety over the prospects of a recession this year, the labor market showed remarkable resilience.
Federal Reserve Chair Jerome Powell said the economy could recover to 2% inflation without a severe downturn or skyrocketing joblessness.
“Someday soon economists will have to take down those calls for recession in 2023 because the labor market refuses to budge from the lowest unemployment rate in decades,” said Christopher Rupkey, chief economist at FWDBONDS.
Claims for state unemployment benefits experienced a significant drop to 183,000 in the week ending January 28th, the lowest since April 2022.
This marks the third consecutive week of declining applications, defying the expectations of economists who forecast 200,000 claims. Jobless claims saw a significant decrease in states like California, Kentucky and Ohio, balancing out the increases in Georgia and New York.