The number of workers applying for unemployment benefits in the United States inched down last week to a fresh pandemic-era low, suggesting further tightening in the labor market.
First-time filings for unemployment insurance—a proxy for layoffs—came in at 268,000 for the week ending Nov. 13, the Labor Department said in a report (pdf). That’s 1,000 fewer unemployment claims than in the prior week and the lowest level since March 2020, which saw 256,000 filings.
Continuing claims, which run a week behind the initial filings figure and reflect the total number of people receiving benefits through traditional state programs, fell by 129,000 to 2.08 million—also a pandemic-era low.
“Employers having difficulty finding workers are holding on tight to their current rosters, as evidenced by the consistent declines in new unemployment claim filings,” Bankrate Chief Financial Analyst Greg McBride told The Epoch Times in an emailed statement.
A recent report from the National Federation of Independent Business (NFIB) showed that a net 44 percent of small-business owners said they had boosted wages to attract and retain staff, the highest reading in the 48-year history of the series.
“One of the biggest problems for small businesses is the lack of workers for unfilled positions and inventory shortages, which will continue to be a problem during the holiday season,” NFIB chief economist Bill Dunkelberg said in a statement.
Job openings remain close to their all-time highs and the so-called quits rate, which reflects worker confidence in finding a better job, hit a record high of 3.0 percent on the last business day of September—both signs of labor market tightness.
“With 10.4 million open jobs and the highest number of job quits ever, workers have more sway than in recent memory to negotiate pay and hours,” McBride said.
Average hourly earnings rose 4.9 percent in the year through October, a faster pace of wage growth than the 4.6 percent year-on-year increase last month, the Labor Department said in a recent announcement (pdf). Still, with over-the-year consumer price inflation in October running at 6.2 percent—the highest rate in 31 years—wages actually contracted by 1.3 percent in real terms.
Economist Larry Summers, who served as Treasury Secretary under President Bill Clinton and as Director of the National Economic Council under President Barack Obama, warned in a recent interview that continuing fiscal and monetary stimulus at current levels under conditions of increased labor market tightness threatened to push inflation even higher.
“We’ve got to recognize our problem is not that not enough people have jobs,” Summers told CNN. “The current problem is that we are pushing demand into the economy faster than supply can grow and that we are just going to get more and more inflation until we stop doing that,” he said.
“That’s the real problem,” he added.
To help ease inflationary pressures, Summers called for a faster roll-back of the Fed’s bond-buying program, urging for it to be phased out over three months, not the eight that central bank officials announced at a recent policy meeting.