Americans seeking jobless benefits falls as employers continue to hold on to workers

U.S. applications for unemployment benefits fell last week as employers continue to retain workers despite resurgent inflation and elevated interest rates. The number of Americans filing for jobless benefits fell by 7,000 to 213,000 for the week ending February 8, the Labor Department said Thursday. Analysts projected that 215,000 new applications would be filed.

Weekly applications for jobless benefits are considered representative of layoffs.

The four-week average, which smooths out some of the week-to-week volatility, inched down by 1,000 to 216,000.

Despite showing some signs of weakening during the past year, the labor market remains healthy with plentiful jobs and relatively few layoffs.

Last week, the Labor Department reported that U.S. employers added 143,000 jobs in January, significantly fewer than December’s 256,000 job gains. However, the unemployment rate ticked down to an even 4%, signaling a still very healthy labor market.

Late in January, the Federal Reserve left its benchmark lending rate alone after issuing three cuts late in 2024. Fed officials are closely monitoring inflation and the labor market for signs of a potentially weakening economy. They expect only two rate cuts this year, down from previous projections of four.

Average rate on a 30-year mortgage eases to 6.87%, fourth straight weekly decline

The average rate on a 30-year mortgage in the U.S. eased for the fourth week in a row, an encouraging sign for prospective home shoppers as the spring homebuying season gets underway.

The average rate fell to 6.87% from 6.89% last week, mortgage buyer Freddie Mac said Thursday. A year ago, it averaged 6.77%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners seeking to refinance their home loan to a lower rate, rose this week. The average rate increased to 6.09% from 6.05% last week. A year ago, it averaged 6.12%, Freddie Mac said.

Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy decisions. The average rate on a 30-year mortgage briefly fell to a 2-year low last September, but has been mostly hovering around 7% this year. That’s more than double the 2.65% record low the average rate hit a little over four years ago.

December wholesale prices up 0.4% as fight against inflation appears to have stalled

U.S. wholesale prices came in hotter than expected last month with progress against inflation appearing to have stalled, further undercutting expectations for lower interest rates this year.

Economists and financial markets fear President Donald Trump’s policies will push inflation higher yet. His tariffs on foreign goods and plans to deport millions of undocumented workers could translate into higher prices and on Thursday, Trump said that he’ll sign an order that increases U.S. tariffs to the rates other countries charge on imports.

The Labor Department reported Thursday that its producer price index — which tracks inflation before it reaches consumers — rose 0.4% from December and 3.5% from January 2024. The monthly increase was down from an upwardly revised 0.5% in December, and the year-over-year uptick matched December’s. But forecasters had expected a 0.2% change month over month and 3.2% year over year.

— Compiled via The Associated Press