Jobless Claims Plunge to a Record of 199K as Labor Market Improve Gradually
With a strong economy growing gradually, new jobless aid claims last week fell to the lowest level in over 50 years, the Labor Department reported on Wednesday.
According to seasonally adjusted figures, 199,000 new unemployment insurance claims were filed on the week ending precisely on Nov. 20. The latter figure was 71,000 short in the application received the week before.
The claim of the week of Nov. 20. is also less than 225,000 applications filed in by March 14, 2020.
The claim of the week of Nov. 20 is also the lowest level since November 1969.
As we head into the holiday shopping season, unemployment applications have dropped sharply.
This happened following several months of strong job growth and consumer spending.
Although high inflation has put pressure on household budgets, U.S. job growth, economic growth, stock values, and corporate profits have been on the rise.
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“Getting new claims below the 200,000 level for the first time since the pandemic began is truly significant, portraying further improvement,” according to Bankrate.com’s Mark Hamrick.
“The strains associated with higher prices, shortages of supplies, and available job candidates are weighed against low levels of layoffs, wage gains, and a falling unemployment rate,” he added.
“Growth will likely be above par for the foreseeable future, but within the context of historically high inflation which should relax its grip on the economy to some degree in the year ahead.”
After a string of what at first appeared to be meager gains, employment growth in October topped 531,000 and the previous month was revised higher.
As consumer demand surges, businesses are struggling to recruit enough workers to meet it.
However, the drop in jobless claims indicates that the labor market is improving.
“Layoffs are hitting new lows amid ongoing labor shortages as employers look to hold onto hard-to-find workers,” Glassdoor’s senior economist Daniel Zhao said in a Twitter thread on Wednesday.
In any case, Zhao said the sharp decline below pre-pandemic levels could be explained by a lesser seasonal effect on hiring than expected.
“As you can see from the above chart, this is in part due to the seasonal adjustment expecting a much larger jump in non-seasonally adjusted claims, so this dip below pre-crisis levels may be short-lived,” he said.