The number of Americans applying for unemployment benefits plummeted last week to the lowest level in more than half a century, another sign that the U.S. job market is rebounding rapidly from last year’s coronavirus recession.
The lowest level of unemployment since November 1969 was 71,000 to 199,000. The drop was largely due to seasonal adjustments made around Thanksgiving. If unadjusted the claims increased by nearly 18,000 to 259,000
The four-week average of claims, which smooths out weekly ups and downs, also dropped — by 21,000 to just over 252,000, the lowest since mid-March 2020 when the pandemic slammed the economy.
Applications have been steadily declining since reaching 900,000. In January, they were at their highest level. Now, they are below their preandemic levels of about 220,000 per week. Jobless assistance claims are an indicator of layoffs.
The week ended November 13th saw 2 million Americans receive traditional unemployment benefits, a slight decrease from the previous week.
“Overall, expect continued volatility in the headline figures, but the trend remains very slowly lower,” Contingent Macro Advisors wrote in a research note.
The federal government supplemented the state’s unemployment insurance programs with an additional $300 per week payment and extended benefits to gig workers, those out of work for at least six months and others. The federal programs combined meant that more Americans were receiving jobless assistance than ever before June 2020.
After the coronavirus pandemic in spring 2020 caused businesses to shut down or reduce hours, and many Americans were kept at home for their own safety, the market has seen a tremendous recovery. More than 22 million jobs were lost by employers between March 2018 and April 2017.
Government relief, extremely low interest rates, and the introduction of vaccines all combined gave consumers the financial confidence to spend again. As a result of an unanticipated surge in demand, employers have hired 18 million workers since April 2020. They are expecting to hire another 5575,000 people this month. The United States is still 4 million jobs short of what it had in February 2020.
Companies now complain that they can’t find workers to fill job openings, a near-record 10.4 million in September. The first time that workers have had bargaining power in decades is now when they are more selective about job opportunities. In September, an unprecedented 4.4 million people quit, which shows their confidence in finding better work.