US Weekly Jobless Claims Drop to 52-Year Low

A hiring sign is displayed at a furniture store window in Downers Grove, Ill., on  Sept. 17, 2021. (Nam Y. Huh/AP Photo)

The number of workers applying for unemployment benefits in the United States dropped sharply last week to a level not seen in 52 years, adding to signs of a tightening labor market and suggesting businesses were reluctant to let go of workers.

First-time filings for unemployment insurance—a proxy for layoffs—came in at 184,000 for the week ending Dec. 4, the Labor Department said in a report (pdf). That’s a drop of 43,000 from the prior week’s revised level of 227,000 and well-below consensus forecasts of 215,000.

This is the lowest level for initial jobless filings since the week of Sept. 6, 1969, when 182,000 claims were filed. The data dovetails with other labor market data showing American workers quit their jobs at a near-record pace in October while job openings rebounded to near-record highs, adding to signs of labor market tightness.

“This is truly a ‘Great Back’ jobless claims reading,” Bankrate Senior Economic Analyst Mark Hamrick told The Epoch Times in an emailed statement. “The level of new job loss is very low, healing from shocking and heartbreaking crisis levels last year.”

Driven by pandemic lockdowns and a range of business restrictions, the week ending April 4, 2020, saw a record 6.15 million jobless claims.

A weak patch in Thursday’s release was continuing claims, which run a week behind the initial filings figure and reflect the total number of people receiving benefits through traditional state programs. These rose by 38,000 to 1.99 million.

The jobless claims figures come a day after the Labor Department released its monthly Job Openings and Labor Turnover Survey (JOLTS) data, which reinforced the view that the jobs market was getting tighter. The JOLTS report showed job openings rebounding to a near-record high of 11 million in October while the quits rate, which reflects worker confidence in being able to find a better job, edged down to 2.8 percent but remained not far off its all-time high of 3.0 percent.

The historically elevated number of job openings and the high quits rate affirm “that workers are very often in the driver’s seat seeking or retaining jobs,” Hamrick said.

“Establishments are cautious about letting people go because of the challenge filling opening positions. This is helping to keep a lid on new applications for unemployment benefits,” he added.

Struggling to attract and retain staff, businesses have boosted wages, with average hourly earnings up 4.9 percent over the year in October. Surging inflation, which hit a 31-year high of 6.2 percent in the 12 months through October, has more than erased those gains, however, with real average earnings down 1.2 percent over the year.

Other recent labor market data showed the unemployment rate falling to 4.6 percent in November and the labor force participation rate, a measure of people working or actively looking for work, edging up slightly to 61.8 percent, though remaining at a historically depressed level.

While the reason for the lagging labor force participation rate remains unclear, economists have cited COVID-19 fears among employees returning to the office, government assistance programs and policies, the stress of the pandemic prompting a spike in retirements and resignations, and lack of access to affordable child care.