The number of Americans applying for unemployment benefits reduced last week. Unemployment claims have come down to the lowest level in more than half a century. This is an indication that U.S. job market is recovering rapidly. Seasonal adjustments around the Thanksgiving holiday also contributed significantly to the bigger than expected drop.
Jobless Claims Falls Below 200,000 Mark
Jobless claims dropped by 71,000 and currently stands at 199,000. This is the lowest number since November 1969. Economist forecasted that a drop in unemployment claims to 261,000 but the drop exceeded the expectations. Getting jobless claims below the 200,000 level for the first time since the pandemic began is truly significant, portraying further improvement.” This was commented by Mark Hamrick who is a senior economic analyst at Bankrate.
531,000 new jobs were added during the month of October. Hence, the workers have more freedom in opting for the jobs of their preference and they are getting back to work. Another reason causing the return of workers is broadening availability of coronavirus vaccine. Meanwhile, wages also witnessed a 4.9% annual increase which resulted in higher inflation. This combination of increased wages and rising inflation has enabled Federal Reserve to announce that they are cutting back on its $120-billion monthly purchases of Treasuries and mortgage-backed securities. Analysts are also expecting an increase in interest rates during the next year.
Steady Economic Recovery
Jobless claims were at the peak in early January and touched the figure of 900,000. They have decreased gradually and have now fallen below pre-pandemic level of around 220,000. The jobs market also witnessed a remarkable comeback since March 2020. The coronavirus pandemic forced businesses to cut hours or close completely. This forced the citizens to stay home as a health precaution. Furthermore, U.S. employers slashed more than 22 million jobs.
The steps taken by the government on economic front along with vaccines roll out gave confidence to the consumers to sped more. Employers are experiencing a massive surge in demand. United States employers hired more than 18 million workers since April 2020 and are expecting another addition of 575,000 during November 2021.
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