2 min read.Updated: 02 Dec 2021, 07:34 PM ISTGabriel T. Rubin, The Wall Street Journal
Claims rose to 222,000 last week, following the prior week’s report showing lowest number of new claims in 52 years
The number of people filing new claims for unemployment benefits remained near pandemic lows last week as employers continued to hold on to their workers in a tight labor market.
Initial jobless claims, a proxy for layoffs, totaled a seasonally adjusted 222,000 for the week that ended Nov. 27, following the prior week’s report showing the lowest number of new claims in 52 years.
Seasonal adjustments contributed to last week’s low number, with the sharp decline likely overstating the amount of progress in the labor market’s return to pre-pandemic levels.
This week’s report lowered the four-week moving average, which smooths out statistical volatility, to 238,750. The four-week average has continued to drift downward since September, after a brief uptick related to the surge from the Delta variant of Covid-19.
A potential threat to the labor market and overall economy is the newly identified Omicron variant of Covid-19. The global economy could suffer a modest blow from the newest iteration of the virus, though the scale of damage will hinge on the potency of the strain itself, economists say.
The steady decline in claims this fall reflects employers eagerly trying to hire and retain workers who are quitting jobs at a record rate. Economists surveyed by the Journal estimate that the November’s jobs report, to be released on Friday, will show that the US economy created 573,000 jobs last month, following a gain of more than 500,000 in October.
“Employers don’t want to lay off somebody who might in some way be productive," said Marianne Wanamaker, an economist at the University of Tennessee, Knoxville.
Hiring demand is also strong, with job openings hovering near record highs but fewer people looking for jobs. The combination has pushed down layoffs and contributed to steady labor market improvement as the pandemic continues.
“As steady declines in new jobless claims have demonstrated, the risk of job loss is relatively low as many employers focus on retaining and adding workers," said Mark Hamrick, senior economic analyst for Bankrate.com.
The overall U.S. employment total remains nearly 3% lower than before the pandemic, with roughly four million fewer workers. That is due to a combination of older workers retiring and prime-age workers only slowly returning to the labor force because of pandemic-related issues such as inadequate availability of child-care services and fear of infection, economists say.
Those problems may be exacerbated by the newly identified Omicron variant of Covid-19, which could further disrupt working arrangements.
“They’re out of the labor market due to uncertainty," Ms. Wanamaker said.