A strong economic recovery and persistent labor shortage pushed jobless claims to their lowest level in more than half a century last week, just 18 months after the pandemic prompted six million workers to file for unemployment in one week.
First-time claims for unemployment benefits, a proxy for layoffs, fell to 184,000 in the week ended Dec. 4, the lowest level since September 1969, the Labor Department said Thursday. The previous pre-pandemic low of 194,000 was recorded late last month.
Unemployment claims have been steadily falling all year as the labor market has tightened amid a shortage of available workers. While the Omicron variant of Covid-19 represents another threat from the pandemic, economists expect labor market conditions to remain tight.
Claims have now fallen below where they were in the year before the pandemic, when they averaged 218,000.
The steady decline in filings is an indication that employers are reluctant to lay off workers as jobs are plentiful, consumer demand is high and the pool of prospective workers remains lower than before the pandemic.
The labor market is unusually tight, with workers in high demand and jobs going unfilled. In October, there were two unemployed workers for every three job openings.
The unemployment rate last month fell to 4.2% from 4.6% in October, the Labor Department said last week, but hiring slowed. While almost 600,000 joined the workforce, there are still 2.4 million fewer people in the labor force than before the pandemic hit.
The tight labor market is expected to keep unemployment filings close to their pre-pandemic level, said Nancy Vanden Houten, lead economist at Oxford Economics.