The number of Americans collecting unemployment benefits declined to a 52-year low for the week ending Feb. 19, after another decline in jobless applications, according to a report (pdf) by the U.S. Labor Department on Feb. 24.
Jobless claims last week fell by 17,000, from 249,000 to 232,000, but remain above the pandemic low of 188,000 reported on Dec. 4.
The four-week average for claims, which compensates for weekly volatility, also fell by 7,250 to 236,250.Unemployment claims fell for the third straight week to 1.576 million, after rising for five weeks in a row after the Omicron variant hit this winter, disrupting businesses in many parts of the country.
This was the lowest amount since June 30, 1973, when it hovered at 1.57 million applicants.
A total of 1,476,000 Americans were collecting jobless compensation for the week that ended Feb. 12, a decline of about 112,000 from the previous week, and the lowest level since March 14, 1970, when it stood at 1,456,000, according to the Labor Department.
The actual unadjusted initial claims under state programs totaled 214,873 in the week ending Feb. 19, a decrease of 24,824, or 10.4 percent, from the previous week.First-time applications for unemployment claims, which are a weathervane for the pace of layoffs, are back down to pre-pandemic levels.
The Labor Department reported in early February an unexpected burst of hiring in January, with employers adding 467,000 jobs, and revised its estimate upward in November and December for a combined 709,000 in job gains.
The unemployment rate slightly edged up to 4 percent from 3.9 percent, as more people were looking for work, but not all secured jobs right away.
“Continued tightness in the labor market indicates that upward pressure on wages and other employment compensation is not likely to moderate soon,” said Federal Reserve Governor Michelle Bowman in a Feb. 21 speech.“Even with the improving labor market, I still hear from businesses that qualified workers are difficult to find, and labor shortages remain a drag on hiring and on economic growth,” said Bowman.
Massive government stimulus and the reopening of the country after the lockdowns boosted the economy, as employers added a record 6.4 million jobs last year.
The U.S. economy expanded 5.7 percent in 2021, growing at its fastest annual pace since a 7.2 percent surge in 1984 at the end of a recession.
Gross domestic product (GDP) increased at a 7 percent annualized rate in the last quarter of 2021, according to the Commerce Department in its second GDP estimate, slightly up from the previously reported 6.9 percent pace.
The economy grew at a 2.3 percent growth pace in the third quarter of 2021.
Inflation is also at a year-over-year high of 7.5 percent, the worst since 1982, leading the Federal Reserve to ease its monetary support for the economy.
The Fed has signaled that it would begin a series of interest-rate hikes in March and will reverse pandemic-era policies that stimulated economic growth.
It is unknown if the crisis in Ukraine will have any possible ripple effects that could filter down into the American economy, as the report was compiled last week.
