In a very positive sign for the labor market, for the week ending Dec. 25, unemployment applications decreased to 198,000, according to the Labor Department. This is also an 8,000 decrease from the previous week’s level, which was revised up by 1,000 from 205,000 to 206,000.
Dow Jones economists had expected weekly levels of 205,000, according to CNBC. The lowest level prior to this week was the week ending Dec. 4, when claims totaled 188,000, the lowest level since Oct. 1969.
Last week’s four-week moving average, which smooths out volatility, was 199,250, a decrease of 7,250 from the previous week’s revised average. This is the lowest level for this average since October 25, 1969 when it was 199,250, according to the Labor Department.
Jeanniey Walden, CMO of DailyPay, told GOBankingRates that “jobless claims dipped below 200,00 for the second time in a month, approaching levels not seen since Neil Armstrong first set foot on the moon.”
“Just one year ago, employers were laying off four times as many workers every week as they are today,” Walden added. “So what does that augur as we ring in 2022? For starters, we may see a 3% unemployment rate much quicker than expected, putting pressure on a historically tight labor market. If 2021 was the year of the Great Resignation, companies are looking to make 2022 the year of the Great Retention by strengthening the employer-employee relationship.”
The Wall Street Journal reported that Ian Shepherdson, chief economist at Pantheon Macroeconomics, expects Omicron to curb growth less than the Delta wave did earlier in 2021, as long as the newest variant causes less severe disease, and thanks in part to new antiviral treatments.
Shepherdson forecasts the unemployment rate to fall to 3.5%, matching the Federal Reserve’s projection for the end of next year, according to The Wall Street Journal.
On Dec. 16, the Fed increased its inflation outlook for 2021 to 5.3% from its 4.2% projection in September. As for unemployment, the projections decreased to 4.3%, from 4.8% in September, as GOBankingRates previously reported.
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