The number of Americans submitting new claims for unemployment benefits decreased last week, demonstrating that widespread layoffs are still at a low level despite a spike in job losses in the technology industry that have stoked concerns about an impending recession.
The Labor Department’s weekly unemployment claims report, released on Thursday and one of the most recent indicators of the state of the economy, revealed that the labor market remained tight. Together with strong consumer spending, this kept the Federal Reserve on track to raise interest rates even as there were hints that inflation was beginning to slow down.
For the week ending Nov. 12, initial claims for state unemployment benefits decreased by 4,000 to a seasonally adjusted 222,000. 225,000 claims were predicted by economists surveyed by Reuters for the most recent week.
With Twitter, Amazon (AMZN.O), and Meta (META.O), the parent company of Facebook, all announcing thousands of job losses this month, there has been an upsurge in layoffs in the technology sector. Companies in interest rate-sensitive industries like finance and housing are also laying off employees.
Official data has not yet shown any evidence of the layoffs. Last week, unadjusted claims decreased by 6,101 to 199,603. Only 302 more claims were filed in California, the state where the majority of job losses in technology occurred. Florida, Georgia, Kentucky, Indiana, and Texas all reported significant drops in claims, which were more than offset by Minnesota and North Carolina’s considerable increases.
According to economists, businesses outside the technology and housing industries are storing up workers since it has been difficult to locate workers since the COVID-19 outbreak. In September, there were 1.9 job opportunities for every unemployed individual, so some of the employees who are being let go are presumably swiftly finding new jobs.
In a letter this week, Goldman Sachs economists allayed concerns that the layoffs in the technology sector were a sign of an impending recession. They stated that job postings in the technology sector were still significantly higher than they were prior to the epidemic and noted that layoffs in the industry traditionally had not been a strong predictor of worsening in the wider labor market.
Original article was posted here.