Jobless claims fall to 52-year low as layoffs decline
The number of Americans applying for jobless aid plunged last week to the lowest level in 52 years — more evidence that the job market is recovering from last year's coronavirus recession.
First-time unemployment claims dropped to 184,000 last week, a drop of 43,000 from the previous week and the lowest since September of 1969, the Labor Department said Thursday. The four-week moving average, which smooths out weekly volatility, fell to below 219,000, the lowest since the pandemic slammed the U.S. in March 2020.
Weekly claims, a proxy for layoffs, have fallen steadily this year since topping 900,000 one week in early January and are now below the 220,000-a-week level that was typical before the health crisis.
"Employers who are in need of more openings to be filled are certainly holding on to their existing employees, and in many cases are having to raise wages to keep them and certainly to attract new ones," Peter Boockvar, Chief Investment Officer with The Bleakley Advisory Group, said in a note to investors.
Overall, just under 2 million Americans were collecting traditional unemployment benefits the last week of November. Last year, the figure was 5 million.
Massive government aid and the rollout of vaccines have helped revive the economy by giving Americans the confidence and financial resources to keep spending. In March and April last year, the U.S. shed 22 million jobs. It has since regained more than 18 million. Still, the economy remains vulnerable to COVID-19 variants such as Omicron.
Thursday's figures come after a mixed hiring report for November, in which the Labor Department noted that just 210,000 jobs were added, but the unemployment rate dropped sharply to 4.2%. This week, the government reported that employers posted a near-record 11 million job openings in October. It also said that 4.2 million people quit their jobs — just below the September record of 4.4 million — a sign that they are confident enough in their prospects to look for something better. That's making employers extremely hesitant to lay off staff.
"Weekly jobless claims falling to the lowest level since 1969 is powerful evidence of how desperately employers need to keep workers who are quitting at near-record rates," Robert Frick, corporate economist at Navy Federal Credit Union, said in a note.