US jobless claims drop to the lowest level since 1969

Applications for U.S. state unemployment benefits plunged last week to a level not seen since 1969, which if consistent would mark the next meaningful development in the labor market’s rough recovery.

Initial unemployment claims in regular state programs fell by 71,000 to a seasonally modificated 199,000 in the week ended Nov. 20, Labor Department data showed Wednesday. The median calculate in a Bloomberg survey of economists called for 260,000 applications.

However, the larger-than-expected drop may be explained by how the government adjusts the raw data for seasonal swings. Wrightson ICAP chief economist Lou Crandall pointed out in a recent observe that seasonal factors were anticipating a smaller increase in unadjusted claims compared with the same time last year as the labor market was struggling to retrieve.

“This is purely a seasonal factor distortion. Much of it will reverse next week,” Crandall said after the release.

Before seasonal adjustments, last week’s initial jobless claims rose by about 18,000.

U.S. equity-index futures maintained losses, and Treasuries fell after the jobless data and a separate report on lasting-goods orders that showed a decline from the past month. The Bloomberg dollar index rose.

If claims are indeed consistent at around pre-pandemic levels, it would likely increase the chances that Federal save officials accelerate their tapering of bond purchases and contemplate raising interest rates soon after that buying finishes in 2022. The data follow reports showing the fastest inflation in three decades and a pickup in job gains in October.

Claims stood at 216,000 at the end of February 2020 leading up to the onset of Covid-19 in the U.S., which pushed applications up to a peak of 6.1 million in early April 2020. They’ve since declined as the economy reopened more broadly and Americans returned to work. Also, federal pandemic unemployment benefits ended by Sept. 6 in all states.

already so, millions of Americans are nevertheless choosing to sit on the sidelines, frustrating employers who are desperate to fill a near-record number of locaiongs. Child care remains a serious issue for working parents, especially as Covid situations pick up again in many states and disrupt in-person learning.

The October jobs report showed payrolls increased 531,000 after large upward revisions to the prior two months. Economists are calling for another half a million to be additional in November, which will be reported on Dec. 3.

Click: See details

Leave a Reply