By Nathalie Voit
Jobless claims for the week ending Nov. 27 totaled 222,000, a report from the Department of Labor (DOL) released Dec. 2 revealed. Initial claims for unemployment insurance were higher than the previous week when first-time filings totaled a downwardly revised 194,000. Thursday’s data shows jobless claims edging toward pre-pandemic levels, a sign of continuing optimism in the labor market.
Applications for the week ending Nov. 27 climbed to 222,000, significantly less than the Dow Jones estimate of 240,000. Jobless claims for the prior reading numbered 194,000, the lowest in more than five decades. The 4-week moving average for seasonally adjusted initial claims was 238,750, the lowest since March 2020, when initial claims totaled 225,500.
“While the backdrop of uncertainty regarding omicron definitely isn’t helping the market, we’re getting some relatively positive news on the labor market front,” said managing director at E-Trade Financial, Mike Loewengart.
“That said, these numbers are backward-looking, so with the new variant coming to light only in the past week, it remains to be seen how it could play a role in effecting the workforce and our economic recovery at large.”
The insured unemployment rate, or the proportion of Americans continuously receiving unemployment aid, was 1.4% for the week ending Nov. 20. Continuing claims, which run one week behind initial claims, decreased by 107,000 to 1.96 million. Insured unemployment fell below 2 million for the first time since the beginning of the pandemic when continuing claims totaled 1.77 million.
Thursday’s report shows approximately 2.3 million Americans receiving unemployment assistance for the week ending Nov. 13, an increase of 21,564 from the prior week. In contrast, over 20.7 million Americans received benefits during the same period last year.
Despite rising last week, claims are gradually nearing pre-pandemic levels. The low number of new filings reflects an increasingly tight labor market. The Labor Department reported over 10 million job openings at the end of September, yet many employers struggle to hire and retain workers amid a drove of labor force exits. There are currently about 3 million more open jobs nationwide than unemployed workers, FOX News reported.
However, the Omicron variant of COVID-19 threatens to upend the economic recovery.
“Workers are in high demand, and businesses are reluctant to reduce their workforce amid persisting shortages,” said chief U.S. economist at High Frequency Economics Rubeela Farooqi.
“Our base case was that supply (of workers) would gradually return as the cushion from savings diminished. However, renewed health concerns are a downside risk that may prevent people from returning to the workforce over coming months.”
The figures come one day ahead of the DOL’s monthly jobs report, which is expected to show nonfarm payrolls rise by 546,000 in November, according to Bloomberg.