Weekly jobless claims for the week that ended on December 4th rose by 18,000 to 206,000. While claims did increase for the week, 206,000 claims are still historically low. Plus, there are still many signs that the labor market as a whole is rebounding from how it was first during the pandemic in 2020.
Before the pandemic started, the normal number for weekly jobless benefits stood around 220,000, a normal rate that often signals a healthy labor market. Once the pandemic started, many Americans were laid off at record rates — especially at the beginning of the pandemic, then again at the beginning of 2021 — and the weekly jobless claims rates surged.
However, now it does appear as if the labor market is rebounding. Because of the labor shortage, it also appears as if employers are reluctant to lay off their current employees. This may be a huge reason why jobless claims have fallen as much as they have. Currently, according to the Labor Department’s new data, the four-week average is at 204,000 — the lowest level recorded since 1969.
While weekly jobless claims are still incredibly low, even with this increase, the labor market as a whole is still working to recover. Most notably, hirings across the country aren’t increasing as initially hoped. Last month, 210,000 hires were recorded, much lower than what many economists (and employers) were hoping for. October also marked a record high of currently open jobs, as 11 million openings were recorded.
However, many people have also voluntarily quit their job in the past few months. This is a good sign for the labor market, as it reveals that employees are confident that they can find a job, even with the many different problems the labor market is currently facing.
Because many different businesses and industries in the United States are currently facing a labor shortage, layoffs have slowed down. Employers aren’t certain that they’ll be able to find new employees, so many have tried to keep all of the employees that they have. The labor shortage in the United States has resulted in many different issues, though economists do hope that these issues cease to be problems once more workers return to the workforce.
Americans aren’t lining back up to go to work for a variety of reasons. Continuing pandemic concerns — especially amid the latest Omicron variant — could continue to keep mass amounts of workers from returning to the workforce. While data has yet to confirm just how the Omicron variant is impacting the economy, many economists are wary that this new variant may disrupt economic growth in some way, much as the Delta variant did. The same could happen with the labor market, especially if layoffs continue again at a mass rate as they did in early 2021.
Economists are also looking to how the labor market will be affected early into next year, once the holiday shopping season winds down to a close. Business activity could slow down, which may help the labor market somewhat — or it could again result in mass layoffs.