Whatever impact inflation is having on the U.S. economy, it doesn’t seem to be affecting the unemployment line much.
The was just a moderate increase in new applications for unemployment assistance last week despite a two-year high in the inflation rate. The results could pave the way for the Federal Reserve to hold steady on interest rates when it meets later this month.
Economists said the war, now in its second month, added another layer of uncertainty for businesses that spent last year trying to navigate a constantly shifting tariffs landscape, according to a report from Reuters.
“The war has increased the downside risks to the labor market and we think it’s too soon to assume that the ceasefire announced earlier this week will last and to say those risks have abated,” Nancy Vanden Houten, lead U.S. economist at Oxford Economics, told the outlet. “But, so far, the claims data indicate that labor market conditions are still stable, with no evidence of an increase in layoffs or a further pullback in hiring.”
Initial claims for state unemployment benefits rose by 16,000 to 219,000 for the week ended April 4, according to statistics released by the Labor Department Thursday. Economists polled by Reuters had forecast 210,000 claims for the latest week.
Low layoffs are anchoring the labor market. A surge in global oil prices has sent the national average gasoline retail price soaring above $4 per gallon for the first time in more than three years and wiped $3.2 trillion from the stock market in March.
