The number of workers applying for unemployment benefits in the United States dropped sharply last week to a level not seen in over 50 years, suggesting businesses were holding on to employees amid a tight labor market.
First-time filings for unemployment insurance—a proxy for layoffs—came in at 199,000 for the week ending Nov. 19, the Labor Department said in a report (pdf). That’s a drop of 71,000 from the prior week’s revised level of 270,000 and well-below consensus forecasts of 260,000.
Besides notching a fresh pandemic-era low and marking the eighth straight week of declines, Wednesday’s jobless claims number is also the lowest since Nov. 15, 1969, when there were 197,000 filings.
“It is fair to say that we didn’t see that coming. Getting new claims below the 200,000 level for the first time since the pandemic began is truly significant, portraying further improvement,” Bankrate Senior Economic Analyst Mark Hamrick told The Epoch Times in an emailed statement.
“Americans head into the heart of the holiday season with a reasonable expectation that an already tight job market will continue to tighten in the months ahead,” he added.
The strong jobless claims data comes as businesses continue to report hiring difficulties, with the most recent report from the National Federation of Independent Business (NFIB) showing that a net 44 percent of small-business owners reported boosting wages to attract and retain staff, the highest reading in the 48-year history of the series.
“One of the biggest problems for small businesses is the lack of workers for unfilled positions and inventory shortages, which will continue to be a problem during the holiday season,” NFIB chief economist Bill Dunkelberg said in a statement earlier in November.
Average hourly earnings rose 4.9 percent in the year through October, a faster pace of wage growth than the 4.6 percent year-on-year increase last month, the Labor Department said in a Nov. 10 release (pdf). Still, with over-the-year consumer price inflation in October running at 6.2 percent, wages actually contracted by around 1.3 percent in real terms.
By Tom Ozimek