The number of new applications for jobless aid budged little during the first week of May, according to data released Thursday by the Labor Department.
In the week ending May 7, initial claims for unemployment insurance totaled 203,000 after season adjustments, 1,000 more than than the previous week’s revised level. The four-week moving average of weekly jobless claims ticked 4,250 claims higher to 192,750.
Jobless claims have remained at or below pre-pandemic levels for months as businesses avoid laying off workers in historically high demand. There were roughly two open jobs for every unemployed American in March, according to data released by the Labor Department last week, and businesses have avoided laying off current staff with workers in short supply.
The U.S. labor market has recovered rapidly from the onset of the pandemic more than two years ago, which claimed 21 million jobs and caused the steepest decline in the U.S. economy since the Great Depression. The economy has recovered all but roughly 1.2 million jobs lost in 2020, returned to its pre-pandemic growth path and has recovered far quicker than most experts expected.
The strength of the labor market, however, faces serious threats from surging inflation driven in part by the labor shortage and a wide range of other pandemic-related factors.
The Federal Reserve is attempting to raise interest rates fast enough to curb inflation by reducing the demand for goods and services in short supply, but slow enough to prevent businesses from shedding workers under the weight of higher borrowing costs and smaller profit margins. Fed Chair Jerome Powell acknowledged last week it would be “very difficult” to curb inflation without causing a broader economic slowdown.