Even though the US job market has been recovering since last year’s coronavirus recession, the number of Americans asking for jobless benefits increased last week.
The Labor Department said Thursday that unemployment claims rose by 28,000 to 222,000, up from a 52-year low of 194,000 the previous week. The four-week average of claims dipped below 239,000, a pandemic low.
Since topping 900,000 in early January, the weekly applications — a proxy for layoffs — have been falling more or less steadily. In total, 2 million Americans received traditional unemployment benefits in the week ending Nov. 20, a decrease of 107,000 from the previous week.
Until September 6, the federal government supplemented state unemployment insurance jobs programs by paying an additional $300 per week and extending benefits to gig workers and those who had been out of work for six months or more. Including federal programs, the number of Americans receiving some form of unemployment assistance reached a high of more than 33 million in June 2020.
Since the spring of 2020, when the coronavirus pandemic forced businesses to close or reduce hours and kept many Americans at home as a health precaution, the job market has rebounded strongly. Employers cut more than 22 million jobs in March and April last year.
However, government relief payments, ultra-low interest rates, and the rollout of vaccines combined give consumers the confidence and financial jobs mean to resume spending. Employers have made 18 million new hires since April 2020, scrambling to meet an unexpected surge in demand, and the jobs report due out Friday is expected to show that they added another 535,000 in November. Nonetheless, the United States is 4 million jobs short of where it was in February 2020.
Companies are now complaining about not being able to find workers to fill job openings, which reached a near-record 10.4 million in September. Workers, who now have bargaining power for the first time in decades, are becoming pickier about jobs; a record 4.4 million quit in September, indicating that they are confident in their ability to find something better.
Nonetheless, economists warn that the highly transmissible omicron variant could jeopardize the economic recovery. “Workers are in high demand and businesses are reluctant to reduce their workforce amid persisting shortages,” said Rubeela Farooqi, chief U.S. economist at High-Frequency Economics. “Our base case was that supply (of workers) would gradually return as the cushion from savings diminished. However, renewed health concerns are a downside risk that may prevent people from returning to the workforce over coming months.”
Source: ABC News