It’s Jobless Thursday on Wednesday!
It’s a day early because of the Thanksgiving holiday, and initial unemployment claims have hit a 52 year low of 199,000.
This is really quite remarkable, though at least part of this is likely a statistical artifact of the seasonal adjustments incorporated into this metric:
Weekly jobless claims fell sharply to the lowest level in 52 years, reflecting the labor market’s tightening as the economy recovers from the effects of the pandemic.
Worker filings for initial unemployment benefits, a proxy for layoffs, dropped 71,000 to 199,000 last week, the lowest level since November 1969, the Labor Department reported Wednesday.
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.
Last week’s drop was calculated after adjusting for seasonal fluctuations. On an unadjusted basis, initial claims rose to 258,600, up more than 18,000 from the previous week. “Even if the data overstated improvement, the overall message is the same,” said Ms. Farooqi. “Workers are in short supply and demand remains strong. As a result, layoffs are falling.”
The four-week moving average for initial claims, which smooths out weekly volatility, dropped to 252,250 last week, a decline of 21,000 from the previous week, seasonally adjusted, and the lowest level since the week ending March 14, 2020 when the Covid-19 crisis began hitting the economy.
Weekly claims averaged 218,000 in 2019 amid a robust labor market, and then rose to a record 6.1 million in the week ended April 4, 2020 as the rapid rise in Covid-19 infections drove widespread closures of swaths of the economy.
The latest data added new details to the broader picture of a robust labor market. 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 still has four fewer million jobs compared with February 2020.
The number of Americans receiving unemployment benefits overall is shrinking after programs created to respond to the pandemic’s effect on the labor market ended in all states in September. Continuing claims — a proxy for those receiving payments — made to pandemic programs and all others dropped to 2.4 million in the week ended Nov. 6, down from 3.2 million the week prior and a sharp decrease from about 12 million in late August, before the pandemic aid expired nationwide. That data isn’t seasonally adjusted and is reported on a several-week delay.
Good news, and probably driven, at least in part, by retailers looking to staff up for the start of the holiday season.