Initial unemployment claims fell to a 52-year low last week, according to Labor Department data released Wednesday, signaling that the job market is recovering from the pandemic.
Just 199,000 Americans filed for initial jobless benefits, a decline of 71,000 from the week prior. The number has fallen for eight straight weeks.
CNBC calls the decline “stunning,” noting that economists expected 260,000 Americans to initiate unemployment claims during the period in question.
A year ago, unemployment claims were around 700,000.
The Wall Street Journal reports:
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.
The decline may be attributable to seasonal adjustments related to the Thanksgiving holiday, but The Associated Press adds:
The four-week average of claims, which smooths out weekly ups and downs, also dropped — by 21,000 to just over 252,000, the lowest since mid-March 2020 when the pandemic slammed the economy.
Since topping 900,000 in early January, the applications have fallen steadily toward and now fallen below their prepandemic level of around 220,000 a week. Claims for jobless aid are a proxy for layoffs.
The Labor Department’s monthly jobs report will be released next week. It will provide key information on the health of the economy.