US unemployment claims fall unexpectedly, housing remains tight

The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, pointing to another month of solid job growth and continued labour market tightness despite efforts by the Federal Reserve to cool demand for workers.

The weekly jobless claims report from the US Department of Labor on Thursday likely does not change expectations that the United States central bank will further scale back the size of its interest rate increases next month. It did, however, pour cold water on financial market hopes that the Fed would pause its fastest rate hiking cycle since the 1980s, which had been fanned by a slump in retail sales in December and a retreat in inflation.

“A low level of layoffs indicates that demand for workers remains strong and labour market conditions remain tight,” said Rubeela Farooqi, chief US economist at High Frequency Economics in White Plains, New York. “Facing workers shortages and challenges in hiring, businesses appear to be reluctant to reduce their head counts.”

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