US Jobless Claims Hit Near 50-Year Low During Christmas Week

WASHINGTON (Sputnik) - Filings for US unemployment benefits hit a near 50-year low during the week to Christmas with some 198,000 claims that came in about 8,000 lower from the previous week’s total, data from the Labor Department showed on Thursday.

“In the week ending December 25, the advance figure for seasonally adjusted initial claims was 198,000, a decrease of 8,000 from the previous week's revised level,” the Labor Department said in a news release. Three weeks prior to that, filings for US unemployment were at 184,000, the lowest for a week since September 6, 1969.

Economists polled by US media had forecast on average 206,000 filings for weekly unemployment benefits last week.

“At this time of year there are heavy seasonal adjustments and problems compensating for holidays but the trend lower in jobless claims is undeniable,” economist Adam Button said in a post on ForexLive.  “Jobs are plentiful in the United States.”

The United States is experiencing one of the greatest transformations of its employment market as the COVID-19 crisis upended labor supply and work trends, putting employees’ demands above those of employers.

Analysts say US workers were enjoying some of the greatest opportunities ever as acute labor shortages and post-pandemic shifts enable them to demand higher wages and prioritize child-care and health concerns.

In a separate report released last week, the Labor Department said the number of Americans quitting their jobs fell from a record high in October while employment opportunities rose, easing some of the tight labor situation.

After staggering unemployment initially triggered by the outbreak of the COVID-19, the labor market has steadily picked up this year, showing a jobless rate of just 4.2% in November from a high of 14.8% in April 2020.

November’s jobless rate of 4.2%, interestingly, came in just above the 4% mark that the Fed defines as maximum employment in the United States.

The central bank needs maximum employment, inflation at 2% or more per annum and steady economic growth to hike interest rates, which it has kept at between zero and 0.25% since the onset of the coronavirus pandemic nearly two years ago.

The economy shrank by 3.5% for all of 2020 due to the pandemic measures. Growth this year has been spotty, with an annualized 3.5% expansion in the first quarter, 3.6% in the second and 2.0% in the third.

The Federal Reserve has projected a 5.5% growth for all this year and 4% for 2022. The central bank’s problem though is inflation, running at near 40-year highs as prices have soared from the lows of the pandemic due to higher wage demands and supply chain disruptions.