U.S. unemployment applications changed little last week, suggesting the labor market is continuing on its way to recovery from pandemic highs.
Unemployment claims totaled 205,000 in the week ending December 18, 2021, unchanged from the week prior the Bureau of Labor Statistics reported this morning. Economists had expected 205,000 unemployment applications according to the median estimate in a Bloomberg survey.
The 4-week moving average, which is used to smooth out volatility, increased by 2,750 to 206,250 from the previous week’s revised average. The previous week’s revised average was revised down by 250 from 203,750 to 203,500.
A new pandemic low was reached, with state benefit insured unemployment during the week ending December 11 decreasing 8,000 from the previous week’s revised level to come down to 1,859,000. This is the lowest level for insured unemployment since March 14, 2020, when it was 1,770,000.
Unemployment claims have been dropping as the labor market recovers, especially during the holiday season. For the week ending Dec. 4, applications hit not just a pandemic low but reached 188,000 representing a 52-year low in unemployment claims.
The BOLS report is a good indicator for layoffs versus the number of new jobs added. The trend in a reduction of weekly unemployment claims suggests employers are doing a better job of retaining their employees than they were at the beginning of the pandemic. This can point to an overall improvement in the health of the labor market, which has faced historically tight lines during the pandemic. For one of the first times in American history, there are more available jobs than there are willing workers to fill the positions. One of the first steps in rebalancing that figure is attrition rates, which have been trending down and showing positive signs of improvement over the last several months.
Still, the Omicron variant concerns now pose new risks heading into the winter months for both hiring and short-term employee retainment.
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