The week before President Joe Biden was inaugurated, weekly jobless claims were still a painfully high 886,000. like the ones on CNBC report yesterday it became clear, we have come a long way since then.
New claims for US jobless benefits fell to a 52-1/2-year low last week, while the number of Americans on jobless rolls continued to decline, pointing to a rapid decline in job slack. labor market that will keep wage inflation on the rise. Initial claims for state jobless benefits fell a seasonally adjusted 28,000 to 187,000 for the week ending March 19, the lowest level since September 1969, the Labor Department said Thursday.
Note that the same data showed continued claims (people receiving jobless aid after an initial week) also fell to their lowest level since January 1970.
At first glance, the importance of some of these numbers may seem elusive; in fact, 187,000 initial claims might even seem like a grand total to some, so let’s recheck our coverage since december to help add some context.
It was exactly two years ago this week that jobless claims first spiked in response to the Covid-19 crisis, reaching more than 3 million. That weekly total soon reached nearly 7 million as the economy tanked. For 55 consecutive weeks, the number of Americans filing for unemployment benefits was worse than at any time during the Great Recession.
Fortunately, all that seems to be behind us.
Periodically over the course of the crisis, there have been low-key celebrations based on thresholds. When jobless claims finally dipped below 1 million in August 2020, it was a step in the right direction. When they fell below 800,000 in February 2021, it offered similar evidence of slow and gradual progress. Fortunately, the pattern continued: totals fell below 700,000 in March, below 600,000 in April, below 500,000 in early May, and below 400,000 in late May.
In early October 2020, jobless claims finally fell below 300,000, putting us within range of levels seen before the Covid crisis began, and now we are below 200,000, which that seemed difficult in the recent past.
For almost two years, the goal was to reach a number that resembles normal. In the first few months of 2020, the average number of jobless claims in the US was about 211,000, with many wondering how long it would take to get back to that total.
As of today, we have not only returned to the pre-pandemic average, but we have also improved it. These data come from latest jobs reportwhich showed that the unemployment rate was back below 4 percent and that the economy had already created 1.16 million jobs so far in 2022.
The economy still needs work, and inflation remains an obvious problem, but progress like these is still worth celebrating.
Postscript: Some friends asked me a while back about the difference between weekly unemployment claims data and monthly job numbers, so let’s quickly review.
Every Thursday morning, the Department of Labor issues a report documenting jobless claims for the first time across the country. This data, which is revised a week later, effectively summarizes the number of Americans who were laid off in the previous week. It does not include people who voluntarily left the workforce upon retirement or those who quit their jobs and are therefore not eligible for unemployment benefits.
It’s an important weekly look at the jobs outlook for an obvious reason: The more Americans who are laid off, the worse it looks for the economy. The reverse is also true: As layoff totals improve, as they are now, it is evidence of a healthier economy.
However, on the first Friday of every month, the Department of Labor’s Bureau of Labor Statistics releases a more comprehensive report. Does not count weekly layoffs; counts the total number of jobs created since the previous month. The two numbers are related, but they don’t always move together: Just because employers aren’t laying off workers doesn’t necessarily mean employers are hiring workers.
That’s partly why the monthly report gets so much more attention: It gives us a sense of how many jobs are being created, whether wages are going up or down, what the overall unemployment rate is, and so on.