Initial claims for jobless benefits fell last week to 199,000
Jobless claims fell sharply to 199,000 last week, the lowest level in 52 years, marking a milestone in the labor market’s recovery from the effects of pandemic.
Worker filings for initial unemployment benefits, a proxy for layoffs, dropped 71,000 in the week ended Nov. 20 from the prior week, the Labor Department reported Wednesday.
Claims averaged 218,000 a week in 2019.
Claims have slipped steadily since ticking up in late September, as the wave of Delta variant infections crested. The decline, along with near-record levels of job openings, signals strengthening demand for labor, said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
“Claims have been moving in the right direction and are sending a positive signal about the labor market. Businesses are wary of letting go of workers amid a severe labor shortage,” she said.
Employers added 531,000 jobs in October—the biggest monthly gain in three months—as the unemployment rate dropped to 4.6% from 4.8% a month earlier, the Labor Department reported. However, the U.S. economy is still missing more than four million jobs compared with February 2020.
Other data indicate continuing strong employer demand for workers. As of mid-November, job postings on Indeed, a job-search site, were 52% above where they were ahead of the pandemic in February 2020, after adjusting for seasonal variation.
Companies across the economy report they are struggling to find workers. Retailers, hospitality, leisure and logistics firms are particularly strapped and have been raising pay to avoid staff shortages during the critical holiday shopping and travel season.
The so-called quits rate—a measurement of workers leaving jobs as a share of overall employment—was 3% in September, a record high, Labor Department figures tracing back to 2000 show.
The booming job market has been a boon for Caleb Waack’s career. The 28-year-old starts a new job in data engineering for an online mattress firm next Monday, his third since the pandemic began. Mr. Waack seized on the extra time reaped from working remotely to study up on programming, helping him transition from automotive engineering to consumer goods and, ultimately, to his chosen field of data science.
He said he received an offer for his new job within a week of applying, compared with a five-week turnaround time for the role he took in mid-2020.
“The labor market is scorching hot,” said Mr. Waack, who lives in De Pere, Wis. “The salary increase is—it’s significant, definitely higher than inflation. It’s an employees’ market, right?”
The recent upswing in Covid-19 infections could put a damper on labor-market improvement in coming weeks, said Robert Frick, corporate economist at Navy Federal Credit Union. “When they climb quickly, layoffs—especially of lower-income workers in the service industry—are quick to happen,” he said. Cases as of Nov. 22 were up 13.5% from a week earlier, according to a Wall Street Journal analysis of Johns Hopkins University data.
“With every successive wave there’s less of an effect on the economy…because more people are vaccinated and less fearful about going out and traveling,” said Mr. Frick. “But it’s certainly a factor—and how much it is a factor depends on how bad the [current] Covid wave will be.”