The number of Americans who for Unemployment benefit dropped to its lowest level in more than half a century last week, the latest sign that the labor market is recovering from the coronavirus pandemic.
Figures released by the Labor Department on Wednesday show that jobless claims for the week ending November 20 fell from a revised 270,000 last week to 199,000, slightly beating the 260,000 forecast by Refinitive analysts. It is unclear
It marks the highest level of unemployment claims since November 15, 1969, when there were 197,000 applicants, and has fallen below the pre-pandemic February 2020 average of 211,700.
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Continued claims, or the number of Americans on consecutive unemployment benefits, decreased to 2.049 million, a decrease of 60,000 from the previous week. This is the lowest level of insured unemployment since March 14, 2020 at 1.77 million.
The report shows that approximately 2.4 million Americans were on unemployment benefits for the week ending November 6, a decrease of 752,390 from the previous week; For comparison, just over a year ago, an estimated 21.11 million Americans were in receipt of benefits.
While it’s unclear what sparked the staggering decline, economists said it could be evidence that – in the face of an incredibly tight labor market – employers are curbing layoffs and making an effort to keep the existing workers as a record number of workers has given up their jobs in the US looking for more money and more flexibility.
“Layoffs are hitting new lows amid ongoing labor shortages as employers seek to retain hard-to-find workers,” said Daniel Zhao, chief economist at Glassdoor, on Twitter. (Zhao also cautioned against making historical comparisons with unemployment entitlement data, as unemployment insurance programs have changed over time in terms of eligibility and other factors.)
The Department of Labor reported earlier this month that there were 10.4 million vacancies at the end of September. Although little has changed since late August, it is still an astonishingly high number; There are approximately 3 million more job vacancies than unemployed Americans looking for work.
Still, seasonal adjustments seemed to play some role in the better-than-expected number: unadjusted claims totaled 258,622 – a 7.6% increase from the previous week.
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“The sharp drop in weekly jobless claims smells like seasonal adjustment noise, especially when you consider that the unadjusted number has risen by 18,000,” said Robert Frick, business economist with the Navy Federal Credit Union. “Especially with rising COVID-19 cases, a decrease of seven times the most recent average seems very unlikely.”
A separate economic report released by the Commerce Department on Wednesday morning showed that second quarter GDP growth was revised up slightly to 2.1%. At 2.2%, it was below the refinitive estimates.