More Americans file jobless claims but layoff rate remains low

Latest economic data shows labour market in the US is still tight

Jobless claims in the US increased but remained relatively low. EPA

The number of people who filed for unemployment in the US last week rose slightly, showing signs that the labour market remains tight despite aggressive interest-rate increases by the Federal Reserve.

The number of jobless claims — an indicator for layoffs — in the week ending March 25 increased by 7,000 to a seasonally adjusted total of 198,000, the Labour Department reported on Thursday. The four-week moving average was 198,250, up from last week's figure of 196,250.

On an unadjusted basis, the number of initial jobless claims increased by 10,906 to 223,913.

Jobless claims have remained relatively low in the US despite large amounts of layoffs reported across the tech industry.

The Fed raised its interest rates by 25 basis points last week, signalling it could pause its rate increases soon, as it continues efforts to tamp down inflation in the US. The Fed hopes that by raising interest rates it could also soften the labour market, ostensibly in the form of layoffs.

But at a 3.6 per cent unemployment rate, the US labour market remains tight. The Fed anticipates unemployment to rise to 4.5 per cent by the end of the year, according to their economic forecasts published last week.