(The Hill) – New weekly jobless claims plunged to the lowest level in more than 50 years last week, according to data released by the Labor Department on Wednesday.
In the week ending November 20, there were 199,000 initial unemployment insurance claims, according to seasonally adjusted figures, a decrease of 71,000 from the previous week. Requests fell to the lowest level since November 1969 and are now well below the pre-pandemic low of 225,000 requests received the week of March 14, 2020.
The sharp drop in jobless claims comes after several months of strong job growth and rising consumer spending as the holiday shopping season approaches. While high inflation has strained the budgets of many households, job growth, economic output, stock values and corporate profits in the United States have all advanced.
“Getting new claims below the 200,000 level for the first time since the start of the pandemic is really important, portraying further improvement,” said Mark Hamrick, chief economic analyst at Bankrate.com.
“The tensions associated with rising prices, shortages of supplies and available candidates are weighed against low levels of layoffs, wage gains and falling unemployment rates,” he continued. “Growth is likely to be above normal for the foreseeable future, but against the background of historically high inflation which is expected to loosen its grip on the economy to some extent over the coming year.”
The United States created 531,000 jobs in October, and job growth in previous months has been revised significantly upwards after a series of what at first appeared to be meager gains. While companies have struggled to hire enough workers to meet growing consumer demand, declining jobless claims appear to be a sign of an improving labor market.
“Layoffs are reaching new lows amid continued labor shortages as employers seek to retain hard-to-find workers,” said Daniel Zhao, senior economist at Glassdoor, in a discussion thread Wednesday on Twitter.
Even so, Zhao said the sharp drop below pre-pandemic levels could be due to a weaker-than-expected seasonal impact on hiring.
“As you can see from the graph above, this is in part due to the seasonal adjustment which expects a much larger increase in unadjusted claims, hence this drop below pre-crisis levels. may be short-lived, ”he explained.
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