Jobless claims hit a near-50-year low

The latest report on America's unemployment situation shows that the job recovery in the country is in full swing. The Labor Department reported that the average number of weekly jobless claims over the last four weeks fell to 199,250 which is the lowest four-week moving average since the October of 1969. Just last week, 198,000 people filed for jobless claims in the country, after adjustments for seasonal swings. This number was slightly less than what economists had predicted but it was still above the pre-pandemic era low. 

This data is a sign that the labor market is strengthening even though the recent number of claims plunge might overstate the actual improvements in the market. According to Gus Faucher, PNC chief economist, the winter holidays always add some volatility to the numbers. But even after accounting for this volatility, the bottom line is that America is back to work. Faucher says, "Demand for labor is very strong and workers are in short supply, so businesses are not laying off employees. Those workers who do find themselves unemployed can quickly find new jobs." 

Even though the pandemic is not over, there are other obstacles in the way. At the moment, it's the Omicron variant. So far, the spike in Omicron cases hasn't shown up in the jobs data. It's "a substantial downside near-term risk to the outlook for job growth," Faucher says. "If consumers change their behavior and pull back on their spending, particularly on services, job growth could slow dramatically in early 2022", he adds. 

Source: CNN