Jobless claims rise but remain historically low
WASHINGTON — The number of Americans applying for unemployment benefits rose last week despite signs that the U.S. labor market is rebounding from last year’s coronavirus recession.
Jobless claims rose by 18,000 to a 206,000, still low by historical standards. The four-week average, which smooths out weekto-week volatility, fell by 16,000 to less than 204,000, the lowest level since mid-November 1969 when the American job market was less than half the size it is now, according Department of Labor figures released Thursday.
Altogether, 1.8 million Americans were receiving traditional jobless benefits the week that ended Dec. 4, down by 154,000 from the previous week.
Weekly claims, which are a proxy for layoffs, have fallen steadily most of the year since topping 900,000 one week in early January. They are now below to the 220,000-a-week level typical before the coronavirus pandemic slammed the U.S. economy in March 2020; COVID-19 forced consumers to stay home as health precaution and businesses to close or reduce hours and to lay off staff. In March and April last year, employers shed a staggering 22.4 million jobs.
Missouri, Kentucky and Virginia led states with the biggest increases in unadjusted claims from the prior week, while New York, Texas and North Carolina recorded significant declines.
Massive government aid and the rollout of vaccines helped revive the economy and the job market by giving Americans the confidence and savings to go on a shopping spree, often online, for goods such as lawn furniture and coffee makers. Since April last year, the United States has regained nearly 18.5 million jobs. But the economy is still 3.9 million jobs short of where it stood in February 2020, and COVID variants like omicron pose a risk to the recovery.
Employers added a disappointing 210,000 jobs last month. But the November jobs report also showed that the unemployment rate dropped to a pandemic low of 4.2 percent from 4.6 percent in October.
Firms have been reluctant to let go of staff as they struggle to meet robust demand for goods and services amid widespread labor shortages.
Businesses and other employers posted a nearrecord 11 million job openings in October. And 4.2 million people quit their jobs — just off the September record of 4.4 million — a sign that they are confident enough in their prospects to look for something better.
“Demand for labor is very strong and workers are in short supply, so layoffs are very low,” Gus Faucher, chief economist at PNC Financial Services Group, said in a research note. “Those workers who do find themselves unemployed can quickly find new jobs. The biggest problem for the labor market right now is too few workers.”
Claims figures have been choppy in recent weeks, reflecting challenges around adjusting the raw data for seasonal effects during the holiday period. Still, economists broadly agree that the labor market is very tight, and applications are generally consistent with prepandemic levels.
However, a rise in COVID-19 hospitalizations in many states and lingering uncertainties over the new omicron variant threaten to disrupt the pace of hiring heading into the new year.
The Federal Reserve on Wednesday decided to quicken the pace of reducing its asset purchases, reflecting both higher inflation and a strengthening labor market.
Chair Jerome Powell said the economy has yet to reach maximum employment, and participation could be constrained for some time.