The number of Americans applying for unemployment benefits plunged last week to the lowest level in 52 years, more evidence that the U.S. job market is recovering from last year’s recession.
Unemployment claims dropped by 43,000 to 184,000 last week, the lowest since September 1969, the Labor Department said this morning. The four-week moving average, which smooths out week-to-week ups and downs, fell below 219,000, the lowest since the pandemic hit the U.S. hard in March 2020.
Seasonal volatility likely contributed to last week’s drop as the Labor Department adjusted the numbers to reflect job market fluctuations around the holidays, says Stephen Stanley, chief economist at Amherst Pierpont Securities. Before seasonal adjustments, claims actually rose by nearly 64,000 to almost 281,000.
Still, Stanley said in a research note that “the underlying trend remains downward and should be lower than it was prior to the pandemic. … The unfilled demand for workers is much larger than it was then and layoffs appear to be noticeably lower.”
Overall, just under 2 million Americans were collecting traditional unemployment benefits the week that ended Nov. 27. Weekly claims, which are a proxy for layoffs, have fallen steadily most of the year since topping 900,000 one week in early January. They are now below the 220,000-a-week level typical before the coronavirus pandemic slammed the economy in March 2020. Read more.
