Jobless claims fall by 18K

New weekly claims for jobless benefits fell by 18,000 last week, according to data released Thursday by the Labor Department.

In the week ending Feb. 26, seasonally adjusted new applications for unemployment insurance totaled 215,000, down from a revised total of 233,000 in the previous week. New jobless claims have fallen in five of the past six weeks and have remained in line with pre-pandemic levels for most of 2022.

Layoffs have remained low for months as employers struggle to fill more than 10 million open jobs from a labor force short millions of workers from pre-pandemic levels. While a record-breaking surge of COVID-19 cases caused a brief rise in claims, layoffs have fallen back toward 200,000 per week as the omicron variant’s spread slowed.

“Weekly unemployment insurance claims are back to historically low levels after a two-month jump thanks mainly to the Omicron wave. We may even see it fall lower: services sector hiring should accelerate now that Omicron is petering, and employers are still loath to let workers go given how hard hiring is,” said Robert Frick, corporate economist at Navy Federal Credit Union.

Continuing claims for jobless benefits rose slightly last week, but the four-week moving average of continuing claims fell to 1,539,500, the lowest level since April 1970.

The strong jobless claims data comes a day before the federal government is set to release the February jobs report. Economists expect the U.S. to have added roughly 400,000 jobs last month after gaining 467,000 jobs in January.

Another solid monthly job gain would be welcome news for President Biden and Democrats, who are struggling to sell voters on a rapid economic recovery amid high inflation. While wages have risen sharply and demand for workers is at historic levels, prices rose 7.5 percent in the 12 months ending in January and have weighed heavily on Biden’s approval rating.

The Federal Reserve is poised to begin a series of interest rate hikes in March with inflation well above its 2 percent annual target and the job market continuing to make gains. Fed Chair Jerome Powell said the central bank plans to move carefully amid deep uncertainty created by the Russian invasion of Ukraine.