The number of Americans filing new claims for unemployment benefits fell to their lowest level since 1969 last week, pointing to sustained strength in the economy as a year marked by shortages and an unending pandemic winds down.
Based on U.S. Department of Labor figures, jobless claims dropped by 71,000 to 199,000, the lowest since mid-November 1969. The drop was much bigger than economists expected.
In a Reuters poll of economists, most were expecting to see a figure approaching 260,000 jobless claims for the latest week.
The steep drop in unemployment applications comes after several strong months of job growth and rising consumer spending heading into the holiday shopping season.
While jobless claims have descended from a record high of 6.149 million in early April 2020, the figures released today are indicative of a healthy labor market. However, we still have an acute labor shortage.
While high inflation has stressed many household budgets, U.S. job growth, economic production, stock values, and corporate profits have all steamed ahead, so it will be interesting to see the figures at the start of December.
“Getting new claims below the 200,000 level for the first time since the pandemic began is truly significant, portraying further improvement,” said Mark Hamrick, chief economic analyst at Bankrate.com, according to The Hill.
“The strains associated with higher prices, shortages of supplies, and available job candidates are weighed against low levels of layoffs, wage gains, and a falling unemployment rate,” he continued. “Growth will likely be above par for the foreseeable future, but within the context of historically high inflation which should relax its grip on the economy to some degree in the year ahead.”