- Initial unemployment claims for benefits were around 199,000 per week in December. This is four times lower than the January 2021 levels and less than the pre-pandemic level in December 2019.
- The trend suggests the possibility of a decrease in layoffs. Openings for jobs are at records and there’s a high need for employees.
- In the midst of the highly infectious Omicron variant could negatively affect the employment market by early 2022.
Claims to jobless claims / unemployment benefits at the end of 2021 are at pre-pandemic levels following an increase in employment rates that caused claims to drop nearly fourfold throughout the year. However, an increase in Covid-19 cases resulting from the spread of the infectious omicron variant could adversely impact the employment market as early as 2022.
Initial claims are a way to determine eligibility for applications for benefits after an employee’s layoff. Americans have filed 198,000 unemployment claims this last week, on a seasonal adjusted basis according to the Labor Department. They revealed this on Thursday, 30th December 2021 report, the US Labor Department’s last update prior to the start of the new year. The figure is slightly more than the lower 52 year low that was recorded during December.
Initial claims averaged 199.250 a week in December — nearly four times less than the average of 849,000 at the start of this period (in the month of January in 2021) and lower than the pre-pandemic average of 225,000 in December as per the analysis the data obtained from Federal Reserve Bank of St. Louis.
The overall decrease in claims indicates lower layoffs. “With the number of job openings as high in number and employers trying to find or recruit new employees the security of their jobs could be seen as one of the best gifts of the holiday season from the perspective of a worker’s point of,” Bankrate senior economic analyst Mark Hamrick said in an examination of claims for unemployment earlier in the month.
Workers who have been laid off may also not be eligible to receive unemployment benefits if they have recently gotten (and exhausted)state aid following having been laid off in the past. The situation could affect the weekly figures for claims but the degree to which this is happening isn’t clear.
Benefit programs for the pandemic era and extended the length of assistance beyond the standard 26 weeks, ended on Labor Day. They also offered the benefit of an additional $300 per week.
It appears that the U.S. unemployment rate has dropped “farther and more quickly” than was anticipated, according to Jason Furman, an economist at Harvard University and economic advisor to former President Barack Obama. The 4.2 percent unemployment rate in November was the lowest since February 2020.
The ratio of jobless workers to jobs available of job openings was 0.6 during November. This was which is the lowest in recent history, Furman noted. Employment growth is also strong in 2021, as the economy has been growing by 555,000 jobs per month on average since December of last year, as expected Furman stated.
But the economy is just a few million jobs short of its pre-pandemic level, according to the Bureau of Labor Statistics.
The workforce’s supply has been “disappointing,” Furman said. About 2.4 million fewer people are in the labor market compared to the month of February.
Its “realistic” percentage of unemployment, which is adjusted to reflect this drop in the labor force’s participation rate and other variables the rate is 5.4 percent, which is 1.9 percent higher than the pre-pandemic rate, Furman said.
It’s unclear if the labor-market trend will persist in the coming months and weeks, due to an increase in cases attributed to the extremely contagious omicron Covid variant. Restaurants, entertainment venues, hotels as well as other businesses have been shut down since infections among employees have resulted in a shortage of workers.