The Associated Press reports that the number of Americans applying for unemployment benefits has fallen to its lowest in the past seven months despite recently climbing interest rates implemented to slow the growing labor market.
Last week, ending on September 2, the record-low numbers displayed shocking resistance to the recent business trends.
A September 7 report from the Labor Department said that U.S. applications for “jobless claims fell by 13,000 to 216,000″ last week. The number indicates fewer people were laid off in the past week.
In total, “1.68 million people were collecting unemployment benefits the week that ended August 26, about 40,000 fewer than the previous week. That number hasn’t been lower since a stretch in early January.”
Employers also added 187,000 job openings in August, while the unemployment rate settled at 3.8%, historically low for this time of year. After the surge caused by the COVID-19 pandemic, the U.S. economy has naturally been adding nearly 250,000 jobs per month.
The Labor Department’s report reveals that companies have had a high retention rate for their employees outside an increased number of layoffs in the “technology sector” earlier this year. Notably, the manufacturing, warehousing, and retail industries have begun to slow hiring new employees but haven’t started cutting jobs in adequate numbers yet.
The high retention rates are surprisingly stubborn as the Federal Reserve raised interest rates to 5.4%, the highest in more than 20 years. The Reserve is attempting to bring down wages and take the gas off the job market, and many economists expected the unemployment rates to shoot up in response. However, the market has been resilient.
One explanation for the unusual behavior could be that businesses have struggled to build their workforces to a reasonable level after massive losses during the pandemic. This explains the replenishing hiring power and companies retaining employees to catch up to the demand from their consumers following the “pandemic recession.”
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