Fri. Jan 21st, 2022

Unemployment claims fell by 8,000 to 198,000, the Department of Labor reported Thursday.

The number of Americans applying for unemployment benefits has dropped to below 200,000, more evidence that the labor market remains strong in the wake of last year’s coronavirus recession.

Unemployment claims fell by 8,000 to 198,000, the Department of Labor reported Thursday. The four-week average, which smooths week-to-week volatility, has dropped to just above 199,000, the lowest level since October 1969.

The figures suggest that the fast-spreading Omicron variant has not yet caused a wave of retrenchments.

A total of 1.7 million Americans collected traditional unemployment benefits the week ending December 18th. It was the lowest since March 2020, just as the pandemic began to hit the US economy, declining by 140,000 from the previous week.

The weekly claims numbers, a power of attorney for retrenchments, have been steadily declining for most of the year. Employers are reluctant to let workers go at a time when it is so difficult to find replacements. The United States had a near-record 11 million jobs in October, and 4.2 million Americans resigned their jobs – just outside September’s 4.4 million record – because there were so many jobs.

The labor market has returned from last year’s brief but intense coronavirus recession. When COVID hit, governments ordered lockouts, consumers collapsed at home and many businesses closed or reduced hours. Employers reduced more than 22 million jobs in March and April 2020, and the unemployment rate rose to 14.8 percent.

But large government spending – and ultimately the deployment of vaccines – has brought the economy back. Employers have added 18.5 million jobs since April 2020, leaving the U.S. 3.9 million jobs shorter than it had before the pandemic. The December jobs report, due out next week, is expected to show that the economy has generated another 374,000 jobs this month.

The unemployment rate fell to 4.2 percent, close to what economists consider full employment.

“The overall picture outlined by this data indicates a rapid pace of job growth,” said Joshua Shapiro, U.S. chief economist at consulting firm Maria Fiorini Ramirez Inc. said. Leasing would have been even stronger “if businesses could hire as many workers as they wanted”.

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