Initial US Unemployment Claims
Initial Unemployment claims fell last week to their lowest level since 1969, the Labor Department reported on Wednesday.
New claims for state benefits totaled 199,000 on a seasonally adjusted basis, a decrease of 71,000 from the previous week.
The decline marks an important step in the recovery of the economy from the pandemic. Weekly complaints peaked at over six million in April 2020 as the coronavirus forced businesses and consumers to shut down. As late as early January, amid a winter resurgence of the coronavirus, new state demands exceeded 900,000 in a week.
Unemployment benefit claims have declined sharply since then, but remained well above pre-pandemic levels until very recently.
Unemployment insurance has been a key source of relief after the pandemic put more than 20 million people out of work. To support state payments, emergency benefits were funded by federal pandemic relief bills, although these payments ceased in September, cut aid to 7.5 million people.
Despite a summer lull, the economy has shown signs of recovery lately. Employers created 531,000 jobs in October , andmost economists expect growth to accelerate in the last quarter of the year, boosted by healthy consumer spending.
" Today's data reinforces the historic economic progress we are making and the importance of building on that progress in the weeks to come, "President Biden said in a statement on the report on unemployment claims.
As a measure of progress, Mr Biden pointed to the most recent count of unemployment benefits of all kinds, dating back to early November, which showed the ber number of people with continuing claims - those claiming benefits who have already filed an initial claim - at 2.4 million. The figure just before Thanksgiving last year was over 20 million.
The biggest economic worry in recent times hasn't been theunemployment but inflation, which has skyrocketed amid labor shortages, supply chain disruptions and higher energy prices.
In a separate report on Wednesday, the Commerce Department said that expenses of households rose 1.3% in October, as personal income jumped 0.5%, before adjusting for inflation. It also showed that prices climbed 5% in the 12 months through October.
Data on jobless claims, while certainly welcome news, may not be as good as it sounds. On an unadjusted basis, state claims increased last week. And employment remains 4.2 million belowe its February 2020 level, before the pandemic.
"As the labor market recovers, we believe the latest drop in claims may be overstated" said Gregory Daco, chief US economist at Oxford Economics. "We suspect that last week's decline may have been overstated by bizarre seasonal adjustment factors and believe we may see a rebound in the coming weeks.