The number of Americans filing for unemployment benefits last week tumbled to the lowest level in more than half a century, the latest evidence of an increasingly tight labor market.
Figures released Thursday by the Labor Department show that applications for the week ended April 2 dropped to 166,000 from the revised 171,000 a week earlier, easily beating the 200,000 forecast by Refinitiv analysts. It marked the lowest level for jobless claims since Nov. 30, 1968.
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Continuing claims, or the number of Americans who are consecutively receiving unemployment aid, rose slightly to 1.54 million for the week ended March 26, up by 17,000 from the previous week’s revised level. One year ago, nearly 4 million Americans were receiving unemployment benefits.
“The letting go of workers continued to slow last week,” said Scott Murray, a Nationwide economist. “Employers’ fear of layoffs as initial job hit their lowest level since the late 1960s. The focus of firms is clearly on hiring, not downsizing.”
Claims have hovered around historic lows as the economy continues to recover and Americans ramp up their spending levels. Unprecedented levels of government spending and a speedy vaccine rollout helped to jumpstart the US economy, which expanded 5.7% in 2021.
Businesses have struggled to keep up with the demand, however, and have reported difficulties in onboarding new employees. Thursday’s report suggests that companies are making an effort to retain the workers they already have.
There were roughly 1.8 job openings for every unemployed worker in February, according to a government report that tracks job openings. The number of available jobs has topped 10 million for seven consecutive months; before the pandemic began in February 2020, the highest on record was 7.7 million.
The data emphasizes how newly empowered workers are quitting their jobs in favor of better wages, working conditions and hours as businesses lure new workers with higher salaries – a trend dubbed the “Great Resignation.”
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As a result, Americans’ incomes are rising across the board as employers have ramped up hiring to offset the losses.
Earlier this month, the Labor Department reported another strong burst of hiring in March, with employers adding 431,000 new workers. The unemployment rate fell to 3.7%, the lowest level since February 2020.