Applications for U.S. unemployment benefits fell for the fourth week in five, underscoring the broad resilience of the job market that threatens to keep inflation elevated.
Initial unemployment claims ticked down by 3,000 to 183,000 in the week that ended Jan. 28, the lowest since April, Labor Department data showed Thursday. The median forecast in a Bloomberg survey of economists called for 195,000 applications.
Continuing claims, which include recipients of unemployment benefits for a week or more, fell to 1.66 million in the week that ended Jan. 21, according to the agency.
The labor market, while cooling at the margins, remains tight by many measures and is one of the key hurdles in the Federal Reserve's fight against inflation, officials have said. Even though wage growth has slowed and companies in technology and banking have laid off staff in recent months, demand for employees still far exceeds supply, which is expected to put upward pressure on wages and broader prices.
After the U.S. central bank slowed its pace of interest rate increases to a quarter point Wednesday, Chairman Jerome Powell stressed that the Fed needs to see a better balance in the labor market to curb inflation in services, excluding housing and energy. Powell also acknowledged there's been progress to ease price pressures without weakening the job market so far.
The four-week moving average in initial claims, which smooths out some week-to-week volatility, dropped to 191,750, the lowest since May, according to the Labor Department.
On an unadjusted basis, the agency said, initial claims fell slightly to 224,356, mostly in Kentucky and California.
The data preceded today's U.S. employment report for January, forecast to show hiring moderated, but still grew at a robust pace, and that the unemployment rate remained near a five-decade low. Other data this week showed a softening in labor costs at the end of 2022, while job openings unexpectedly jumped.
A separate report Thursday showed U.S. worker productivity rose in the fourth quarter by the most in a year and labor costs decelerated, a development that, if sustained, could help further ease inflationary pressures.
Information for this report was contributed by Jordan Yadoo of Bloomberg News (WPNS).