U.S. jobless claims hit a more than 50-year low last week as the scorching labor market shows little sign of cooling in the near term.
The Department of Labor released its latest weekly jobless claims report Thursday at 8:30 a.m. ET. Here are the top impression metrics, compared to consensus estimates compiled by Bloomberg:
Initial unemployment insurance claims, week ended March 19: 187,000 against 210,000 expected and 215,000 revised in the previous week
Continuing claims, week ended March 12: 1.350 million vs. 1.400 million expected and 1.417 million revised in the previous week
At 187,000, new jobless claims improved for a straight week and hit the lowest level since September 1969. Continuing claims also fell to 1.35 million – the least since January 1970.
The job market remained a strong point of the US economy, with job vacancies still high but down from record highs as more workers join the workforce from the sidelines.
“Net, net, no one is losing their jobs with companies that are holding their workers tight despite ominous signs of recession on the horizon due to rising gas prices, stock market corrections and gruesome WWII pictures. from Europe,” Chris Rupkey, chief economist at FWDBONDS, wrote in an email Thursday morning. “No wonder workers’ wages are skyrocketing as business leaders offer carrots where they handed out sticks. The omicron variant has no impact on the labor market and anecdotal reports of massive shortages on the labor market are very, very real.”
Going forward, however, some economists have warned that new cases of Omicron’s fast-spreading subvariant, known as BA.2, could at least temporarily disrupt mobility and economic activity across the country. Since this week, about a third of COVID-19 cases in the United States were attributed to the subvariant, although overall new infections still trended downward from the January record. The impact on the labor market — and on demand in the service sector in particular — remains to be seen.
“Right now, US cases are in the sweet spot between the bottom of Omicron’s initial surge and the impending burst of BA.2 cases, but that likely won’t last long,” economist Ian Shepherdson wrote. in chief at Pantheon Macroeconomics, in a note earlier this week. “Our bet … is that the next BA.2 wave will trigger a modest but visible pullback in the discretionary sector, dampening consumption in the first month of the second quarter.”
Still, many economists and policymakers have pointed out that the labor market has weathered previous disruptions from the Omicron wave earlier this year. Nonfarm payrolls rose more than expected in January and February despite the outbreak.
And Federal Reserve Chairman Jerome Powell reiterated his assessment of labor market strength earlier this week, just days after calling the current labor market “tight at an unhealthy level.” during his post-Fed meeting press conference last week.
“The labor market has substantial momentum. Job growth has been fueled by the difficult wave of Omicron, creating 1.75 million jobs over the past three months,” Powell said. said in a speech Monday. “In many ways, the job market is extremely tight, significantly tighter than the very strong job market just before the pandemic.”
The tightness of the labor market also strongly influenced the Fed’s decisions to continue tightening monetary policy, with the economy showing clear signs of strength and the ability to manage less accommodative financial conditions. Last week, the Fed raised interest rates by 25 basis points in its first rate hike since 2018. And St. Louis Fed President Jim Bullard, the only dissenter from that decision who had called for a more aggressive 50 basis point rate hike last week, justified his vote in part given the strength of the U.S. labor market, even in the face of decades-high inflation rates.
“American labor markets are already stronger today than they have been in a generation,” Bullard said in a declaration.
The Federal Open Market Committee is scheduled to meet May 3-4.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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