United States weekly unemployment claims fell below 200,000 on the week that ended on December 18th. According to new data from the Labor Department, claims dropped by 8,000 to 198,000 in total, the lowest number recorded since October 1969. This data suggests that the labor market is in full recovery mode after being impacted by the COVID-19 pandemic. This latest report also signals that the highly contagious Omicron variant has not affected jobs or layoffs at this time.
Currently, it does appear as if employers are reluctant to fire or let go of any of their current employees because of the ongoing labor shortage that is still gripping the nation, as well as various industries in the country. When the pandemic first started, many people were laid off because of regulations, lack of business activity, and other factors. However, in 2021, as more Americans became fully vaccinated and demand for goods and services surged, employers rushed to hire more workers to accurately meet this demand.
However, hirings have been slow for most of the year. While the amount of people hired does increase each month, many Americans haven’t reentered the workforce for a variety of reasons. The pandemic — which has become quite fluid because of the ongoing variants — has therefore kept the labor market from completely recovering. However, it has also kept employers from laying off employees, resulting in these low unemployment claims with each new week.
The unemployment rate has fallen to 4.2%, according to this new data, which is a rate very close to regular, full employment. This is yet another sign that the labor market is finally, fully recovering.
There does remain a lot of job openings, however. In October, a record number of 11 million job openings were recorded. While some jobs have been filled, millions remain unfilled. According to economists, the only thing really holding the labor market back from full recovery is this lack of hires. If hires had happened rapidly, the labor market would be in a better position than it is in. However, considering all the ongoing issues the country is facing because of the pandemic, the state the labor market is in is still strong.
Many Americans have decided to voluntarily quit their jobs — 4.2 million in October — in yet another way the pandemic has caused new records to be made. Some Americans are changing their career paths, others have decided to retire at record rates. While the number of people voluntarily quitting their jobs has slowed down in the past month, rates are still higher than normal.
Even with all of these problems, the labor market is still on the road to full recovery. Previously, economists did worry that the new Omicron variant could possibly impact this path to recovery. Already, the variant has harmed many industries, most notably the airline industry, as airlines have been forced to cancel thousands of flights over the holidays because of a lack of healthy staff. However, thus far, it doesn’t appear that the Omicron variant has impacted the country when it comes to business activity. Americans are still spending money and shopping, or going out to eat and spending money on services. Therefore, layoffs haven’t been affected.