Jobless claims fall despite omicron case surge
WASHINGTON — The number of Americans applying for unemployment benefits fell below 200,000, more evidence that the job market remains strong in the aftermath of last year’s coronavirus recession.
Jobless claims dropped by 8,000 to 198,000, the Labor Department reported Thursday. The four-week average, which smooths out week-to-week volatility, fell to just above 199,000, the lowest level since October 1969.
The numbers suggest that the fast-spreading omicron variant has yet to trigger a wave of layoffs.
Altogether, 1.7 million Americans were collecting traditional unemployment aid the week that ended Dec. 18. That was the lowest since March 2020, just as the pandemic was starting to slam the U.S. economy, and down by 140,000 from the week before.
The weekly claims numbers, a proxy for layoffs, have fallen steadily most of the year. Employers are reluctant to let workers go at a time when it’s so tough to find replacements. The United States had a near-record 11 million job openings in October, and 4.2 million Americans quit their jobs — just off September’s record 4.4 million — because there are so many opportunities.
Labor shortages across the economy have made businesses reluctant to reduce staffing as they struggle to meet robust demand for goods and services. That’s driven new unemployment claims to near their lowest level since 1969 as firms work to retain as many employees as possible.
The job market has bounced back from last year’s brief but intense coronavirus recession. When COVID hit, governments ordered lockdowns, consumers hunkered down at home and many businesses closed or cut back hours. Employers slashed more than 22 million jobs in March and April 2020, and the unemployment rate rocketed to 14.8 percent.
But massive government spending — and eventually the
rollout of vaccines — brought the economy back. Employers have added 18.5 million jobs since April 2020, still leaving the U.S. still 3.9 million jobs short of what it had before the pandemic. The December jobs report, out next week, is expected to show that the economy generated another 374,000 jobs this month.
The unemployment rate has fallen to 4.2 percent, close to what economists consider full employment.
“The overall picture painted by these data points to a rapid pace of job growth,” said Joshua Shapiro, chief U.S. economist at the consulting firm Maria Fiorini Ramirez Inc. Hiring would have been even stronger “had businesses been able to hire as many workers as they wished.”
Claims figures have been choppy in recent weeks, reflecting challenges around adjusting for seasonal effects during the holiday period. Still, initial weekly applications are broadly in line with pre-pandemic levels.
Furthermore, the omicron variant of the coronavirus, depending on how long it lingers as well as responses from state and local governments, risks limiting business and social activity.
California, Texas and Virginia were states with the biggest decreases in unadjusted claims. New Jersey and Pennsylvania registered the largest increases in applications.