Layoffs fell to the lowest point seen in the U.S. in nearly three decades in November, leading to fewer than expected unemployment claims towards the end of the month. According to a December 2 weekly report from the Labor Department, jobless benefits claims fell below 2 million for the first time since before the pandemic began in the final week of November.
In the last full week of November, unemployment claims grew by 28,000, bringing the adjusted seasonal total to 222,000. According to an economist poll conducted by Reuters, claims were expected to reach 240,000. Meanwhile, layoffs fell by nearly 35% last month to a record low of 14,875.
The report is being viewed as a sign of a strengthening economy, alongside strong consumer spending and manufacturing. According to Federal Reserve Chair Jerome Powell, the positive report means that lawmakers should consider speeding up the pace of the U.S. central bank's bond-purchase decreases during their mid-December policy meeting.
"Powell was right to hint the Fed might speed up the tapering process because a tight labor market means increasing wage demands will stoke the fires of inflation," Christopher Rupkey, chief economist at FWDBONDS in New York, said.
While the Dec. 2 report was seen as a positive sign, analysts were still concerned about the possible future effects of the Omicron variant, concerns that might be realized sooner than expected.
The more recent November monthly jobs report gives a less economically rosy view of the coming months. According to the report, the economy created far fewer new jobs than expected last month, even before the Omicron variant emerged. On the other hand, employment participation is increasing, reaching 61.8% in Nov., its highest level since March of last year.
"This report is a tale of two surveys," said Indeed economic research director, Nick Bunker. "The household survey shows accelerating employment gains, workers returning to the labor force, and low levels of involuntary part-time work. The payroll survey shows a significant deceleration in job growth, particularly in COVID-affected sectors."
"The underlying momentum of the labor market is still strong, but this month shows more uncertainty than expected," Bunker continued.
In support of an optimistic view of the labor market, private payrolls increased by 524,000 jobs in Nov., according to the ADP National Employment report. A survey from the Institute for Supply Management also showed a seven-month high in manufacturing employment. A metric calculated by the Conference Report to represent how easy or difficult it is to get a job also reached a record high.
Since the start of the pandemic, the U.S. labor force has decreased by 3 million people, despite the fact that pandemic-era jobless benefits have ended. According to a survey from the Chamber of Commerce, those who lost their jobs during the pandemic aren't in a hurry to rejoin the workforce.
"It is increasingly clear that the workforce challenges facing our country extend beyond those induced by the pandemic," said Chamber of Commerce President Suzanne Clark, "and we cannot simply assume that people will return to the workforce."
