All signs point to a tightening labor market in the United States as layoffs continue to drop. According to new data from the Labor Department, the number of Americans filing new weekly jobless claims increased less than what was initially expected, by about 28,000 to 222,000 overall. While claims didn’t fall as they have in earlier weeks, economists did think that claims would increase the week that ended on November 27, as the week of Thanksgiving tends to be volatile. Analysts initially had claims increasing by 20,000 more than what is currently being recorded.
Just the week before, weekly jobless claims fell to 194,000 overall, the lowest amount recorded since 1969. For the past week, continuing claims have dropped to by 107,000 to 1.956 million overall. Meanwhile, layoffs have now plunged by 34.8% in November as a whole. As a result of all of this data, layoffs are now near a new three-decade low.
This latest data from the Labor Department also shows that jobless benefits have fallen below 2 million for the first time since the COVID-19 pandemic first started in 2020. More than likely, employers have stopped laying off employees because of the labor shortage in the United States. While hires have increased some in the past few months, many economists thought that more people would return to the workforce than the amount that has. Because employers are wary of this labor shortage, they have likely kept on the workers that they have to help meet the consumer demand, rather than lay them off.
According to this new data, filings declined in California, Texas, and Virginia. Meanwhile, North Caroline and Wisconsin increased in filings.
All of this new data comes amid the news that a new coronavirus variant — the Omicron variant — could be more contagious than the previous variants, including the Delta variant. Earlier this year, the Delta variant caused cases and infections to surge around the nation, which also slowed down the country’s economic growth.
As the news of Omicron is still new, we do not have any data to indicate how this new variant is impacting the economy and business activity. While some analysts are wary that this variant may hinder economic growth, most economists still believe that the fourth quarter will experience strong economic growth as people shop for the holidays, even amid this news of a new contagious variant of coronavirus.
The Omicron has only recently been found in the United States. However, the United States government has already restricted travel to different African countries that have experienced a surge in cases because of this new variant. While many travel companies are upset over these restrictions and regulations, there is no telling just how many other travel restrictions may be imposed to help keep the spread of the coronavirus, if any restrictions will be put in place, and how this may impact the country’s economic growth.
While the Omicron variant may negatively impact economic growth, signs still point to a strong fourth quarter.