Inflation soars while jobless claims drop for third week

The Labor Department reported Thursday that applications for unemployment benefits again fell slightly to 223,000 last week, continuing a downward trend. Last week, the department also reported a surprising hiring burst in January, with employers adding 467,000 jobs. But the unemployment rate still rose slightly to 4 percent as some people looking for new positions did not secure them right away. In total, 1.6 million Americans collected unemployment aid the week ending Jan. 29.

What about inflation? The Labor Department says consumer prices jumped 7.5 percent last month compared with a year earlier. That’s the steepest year-over-year increase since 1982. Prices are rising across the economy, from food and furniture to apartment rents, airline fares, and electricity. President Joe Biden said Thursday that Congress can help lower costs by passing his massive spending plan, but Senate Minority Leader Mitch McConnell of Kentucky argued Democratic policies are largely to blame for inflation. Many economists say big government spending during the pandemic drove price increases. Shortages of supplies and workers, ultra-low interest rates, and robust consumer spending have also fueled cost spikes.

Dig deeper: Listen to Nick Eicher discuss inflation and the role of the Federal Reserve with economist David Bahnsen on The World and Everything in It podcast.