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U.S. jobless-aid claims rise to 207,000

by Compiled by Democrat-Gazette Staff From Wire Reports | January 7, 2022 at 1:48 a.m.
FILE - Prospective employers and job seekers interact during during a job fair on Sept. 22, 2021, in the West Hollywood section of Los Angeles. Hiring in California slowed significantly in November 2021 even as the state's unemployment rate dipped below 7% for the first time since March 2020, at the start of the pandemic, according to data made public Friday, Dec. 17, 2021. (AP Photo/Marcio Jose Sanchez, File)

WASHINGTON -- The number of Americans applying for unemployment benefits rose last week but remained at historically low levels, suggesting that the job market remains strong.

U.S. jobless claims rose by 7,000 last week to 207,000. The four-week average of claims, which smooths out week-to-week gyrations, rose by nearly 4,800 to just below 205,000. Despite the increases, the numbers show that weekly claims are below the 220,000 typical before the pandemic struck the U.S. economy in March 2020.

The highly transmissible omicron variant so far does not appear to have triggered significant layoffs.

"New jobless claims are up a bit in the latest week but remain close to the lowest levels in decades," Mark Hamrick, senior economic analyst at Bankrate, said in comments emailed to The Washington Post. "This suggests workers can be reasonably confident about job security and an upbeat employment outlook for this year."

Altogether, nearly 1.8 million Americans were collecting traditional unemployment aid in the week that ended Dec. 25.

"Assuming any layoffs related to omicron are limited amid tight labor market conditions, we expect initial claims to continue to hover around the [200,000] mark," said Nancy Vanden Houten, lead economist at Oxford Economics.

Employers are reluctant to let workers go at a time when it's so tough to find replacements. The United States posted 10.6 million job openings in November, the fifth-highest monthly total in records going back to 2000. A record 4.5 million Americans quit their jobs in November -- a sign that they are confident enough in their prospects to seek something better.

The job market has bounced back from 2020's brief but intense coronavirus recession. When covid hit, governments ordered lockdowns, consumers hunkered down at home and many businesses closed or cut back hours. Employers slashed more than 22 million jobs in March and April 2020, and the unemployment rate rocketed to 14.8%.

But huge amounts of government spending -- and eventually the rollout of vaccines -- brought the economy back. Employers have added 18.5 million jobs since April 2020, still leaving the U.S. 3.9 million jobs short of what it had before the pandemic. Economists expect that today's jobs report will show that the economy generated another 400,000 jobs in December, according to a survey by the data firm FactSet.

The U.S. unemployment rate has fallen to 4.2%, close to what economists consider full employment.

The steadiness of the recovery has shifted the economic conversation away from employment and toward inflation, which remains at multi-decade highs, according to Mike Loewengart, managing director of investment strategy at E-Trade.

"While hiring has certainly been a challenge, the employment picture has been improving and edging toward what it was pre-pandemic," Loewengart said. "So with the labor market somewhat under control, jobless claims are likely going to fade into the background while the Fed is focused on their inflation mandate."

At the same time, the labor force participation rate -- the share of Americans that are either working or looking for work -- was mostly stagnant in 2021.

While some of the factors that have been keeping Americans from reengaging in the job market could abate this year, concerns about the pandemic itself will continue to hold back many job seekers, said Nick Bunker, economist at Indeed Inc. Child care responsibilities will also keep some people from seeking a job, he said.

Another reason for the sluggish rebound in participation is the fact that many older Americans have retired over the past two years. "This is a big chunk of missing workers that we don't think will come back," said Sarah House, senior economist at Wells Fargo.

One difference in 2022 compared with recent years could be that larger-than-usual financial cushions -- generous government stimulus and unemployment benefits -- fade as households spend down savings. That's seen as encouraging some sidelined workers to seek employment.

Information for this article was contributed by Paul Wiseman of The Associated Press; by Taylor Telford of The Washington Post; and by Olivia Rockeman, Molly Smith and Reade Pickert of Bloomberg News (WPNS).

Print Headline: U.S. jobless-aid claims rise to 207,000

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