Unemployment claims decrease in America despite the acceleration in the technology sector

The number of Americans filing new applications for unemployment benefits declined last week, indicating that layoffs are still at a low level.

The U.S. Department of Labor said on Thursday that first-time state jobless claims fell by 4,000, to 222,000, after the seasonally adjusted number of claims for the week ended Nov. 12.

The previous week’s data was revised to show an increase of 1,000 questions from what was reported in precedence. Economists polled by Reuters had expected 225,000 applications to be submitted last week.

The tech sector has seen an increase in layoffs, with Twitter, Amazon and Meta, which owns Facebook, announcing the abolition of thousands of jobs this month. Companies too in sectors like housing and interest-sensitive finance are laying off workers.

Layoffs have not yet appeared in official data and questrequests are around half theirs this year range of 166,000-261,000.

Economists say companies outside the technology and housing sectors are shedding workers, amid difficulties finding workers after the COVID-19 pandemic.

And with 1.9 jobs created for every unemployed person in September, some laid-off workers are likely to find new jobs quickly.

Rising tech layoffs have raised fears of an impending recession. But Goldman Sachs economists ruled that out in a note this week. They said job opportunities in technology are still well above the pre-pandemic level. They also noted that layoffs in the tech sector have not historically been considered a leading indicator of a job market in deterioration in general.

The Federal Reserve raised interest rates by 375 basis points questyear, for practically zero at between 3.75% and 4%, to combat high inflation, in the fastest rate hike since the 1980s. The economy has so far weathered the storm of monetary tightening, with data released on Wednesday showing strong growth in retail sales in October.

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