Jobless Claims Rise but Remain Lower than During the Pandemic
Today, the US Department of Labor published its latest report on weekly jobless claims. While the job market has improved from the peak of the COVID-19 crisis in April 2020, many individuals are still unemployed and seeking unemployment benefits.
According to the report, approximately 230,000 individuals filed initial claims for unemployment benefits, while about 1.559 million individuals filed continuing claims. These figures contrast with the projected 200,000 initial claims and 1.733 million continuing claims. Despite the slight increase in initial claims, the weekly average appears to be decreasing, leading job market experts to be positive about the future trend.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, stated in a communication to clients, “The underlying trend is still declining; we anticipate reaching new lows by the end of the month.”
The number of Americans applying for unemployment benefits rose last week to the highest level since mid-November but remains low by historical standards. ABC News
Nevertheless, nearly two million unemployed individuals is concerning and still exceeds pre-pandemic levels. Beyond pandemic-related layoffs, the ongoing “Great Resignation” trend has prompted many to leave their jobs seeking better conditions and more suitable opportunities. Government officials, especially those at the Federal Reserve, are anxious that increasing prices could further burden the job market, as wage growth struggles to match rising living expenses.
During a Senate Banking Committee testimony on Tuesday, Federal Reserve Chair Jerome Powell remarked, “High inflation poses a serious risk to achieving full employment. If inflation persists at elevated levels and becomes entrenched in our economy and mindset, it will inevitably necessitate more restrictive monetary policies from us, potentially leading to a recession, which would be detrimental to workers.”
