Jobless claims fall to 198,000 and stick near 52-year low. Businesses shun layoffs amid labor shortage

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Numbers: Some 198,000 people who recently lost their jobs applied for unemployment benefits during Christmas week, leaving new jobless claims at a 52-year low amid the biggest labor shortage in decades.

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Initial jobless claims fell slightly from the revised 206,000 two weeks ago, Based on new government data.

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Economists polled by The Wall Street Journal predicted a total of 205,000 seasonally adjusted new claims in the seven days ended December 25.

The extremely low number of people applying for benefits reflects the reluctance of businesses to lay off workers when labor is so hard to obtain. They are having a hard time filling nearly record job openings and may not be able to lay off any employees.

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Meanwhile, the number of people already receiving jobless benefits fell from 140,000 to 1.72 million, Labor Department said on Thursday, These ongoing claims have now returned to pre-crisis levels.

SeeSteady inflation, big paychecks, fading stimulus – how the US economy is shaping up for 2022

big picture: Omicron is hurting the economy, but the new tensions are unlikely to lead to a new wave of large layoffs. In any case, this may temporarily discourage some people from looking for work and exacerbate labor shortages.

High US Inflation Hears Back to the 1980s

Economists predict that the labor shortage will reduce but not go away in 2022, leaving businesses with trouble filling open jobs and producing all the goods and services customers demand. They are offering higher wages and benefits, but so far it is not enough to bring more people back into the labor force.

Main details: California, Texas and Virginia saw the biggest declines in new jobless claims.

New filings rose the most in New Jersey, Pennsylvania, Michigan, Ohio and Massachusetts – states with high numbers of coronavirus cases.

It’s worth keeping in mind that there are often large fluctuations in jobless claims during the holiday season. Companies add lots of temporary workers during the last few months of the year and then let them go after Christmas.

The government tries to adjust jobless claims to account for changes in seasonal employment patterns, but its process has been thrown off by the pandemic.

The raw or actual number of jobless claims — before seasonal adjustments — is somewhat higher. His average per week has been around 260,000 in the past month.

Market Feedback: Dow Jones Industrial Average DJIA,
+0.25%
and S&P 500 SPX,
+0.14%
Were ready to open a little higher in Thursday’s trading.

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