WASHINGTON – The number of Americans claiming unemployment benefits has fallen below 200,000, further proof that the labor market remains strong in the wake of last year’s coronavirus recession.
Unemployment claims fell from 8,000 to 198,000, the Labor Department reported Thursday. The four-week average, which dampens week-to-week volatility, fell to just over 199,000, the lowest level since October 1969.
The numbers suggest that the fast-spreading omicron variant has yet to spark a wave of layoffs.
A total of 1.7 million Americans were receiving traditional unemployment assistance in the week ending December 18. It was the lowest since March 2020, just as the pandemic began to hit the U.S. economy, and down 140,000 from the previous week.
The number of weekly complaints, a proxy for layoffs, declined steadily for most of the year. Employers are reluctant to lay off workers at a time when it is so difficult to find replacements. The United States had a record 11 million job openings in October, and 4.2 million Americans quit their jobs – just after September’s record 4.4 million – because there has so many opportunities.
The labor market has rebounded after the brief but intense coronavirus recession last year. When COVID hit, governments ordered shutdowns, consumers squatted in their homes, and many businesses closed or reduced their hours. Employers cut more than 22 million jobs in March and April 2020, and the unemployment rate climbed to 14.8%.
But massive government spending – and ultimately the rollout of vaccines – brought the economy back. Employers have created 18.5 million jobs since April 2020, still leaving 3.9 million fewer jobs in the United States than before the pandemic. The December jobs report, released next week, is expected to show that the economy generated another 374,000 jobs this month.
The unemployment rate fell to 4.2%, close to what economists consider full employment.
“The overall picture painted by these data indicates a rapid pace of job growth,” said Joshua Shapiro, chief US economist at consultancy firm Maria Fiorini Ramirez Inc. The hiring would have been even more strong “if companies could have hired as many workers as they wanted.”