The Labor Department released its latest weekly jobless report on Thursday morning, and the results showed an improvement in American unemployment. The latest data seems to signify a labor market under distress with little room for layoffs or firings.
- Last week’s American unemployment numbers clocked in at 227,000
- Latest report of unemployment claims is the lowest yet in 2022
- Continuing claims for the week of March 5 were 1.419 million
- Latest number of continuing claims is 61,000 lower than previous week.
To put these numbers in perspective, think back to April 2020, when the pandemic was in full swing. At that time, unemployment claims jumped to nearly 7 million. Now, that number has dropped to 227,000. This is the seventh week in a row that American unemployment claims have been under 250,000 which is roughly around pre-pandemic levels. Meanwhile, continuing claims, which track the number of Americans claiming benefits from state programs, were under 1.5 million for four consecutive weeks.
But as positive as these numbers may look, there’s something else that’s stinting our nation’s economy – alarmingly high inflation.
Federal Reserve Chairman Responds to State of American Unemployment and Inflation, ‘Tight to an Unhealthy Level’
According to Yahoo! Finance, inflation has reached a 40-year high. In response, economists are beginning to worry that the rising prices will seriously damage demand. In addition, these high prices could also put an end to our consistently decreasing rate of unemployment.
“Staggeringly high inflation is set to go higher in forthcoming reports because of impacts from Russia’s invasion of Ukraine and continuing supply chain disruptions including in China,” Mark Hamrick, senior economic analyst at Bankrate, wrote in an email. “These higher costs crimping household budgets risk dampening consumer discretionary purchases. It remains to be seen how much this could negatively affect the job market in the months to come.”
Likewise, Federal Reserve Chair Jerome Powell expressed his concerns about the state of the job market. There are still only less than two jobs per unemployed person.
“If you take a look at today’s labor market, what you have is 1.7+ job openings for every unemployed person. So that is a very, very tight labor market — tight to an unhealthy level, I would say,” the Chairman said during his press conference Wednesday afternoon. “We’re hearing from companies that they can’t hire enough people, they’re having a hard time hiring. “
According to Powell, the only solution to the current situation is to lessen demand. But in a time when we can online shop until our fingertips fall off, this may be difficult to accomplish.
“Across the economy, we’d like to slow demand so that it’s better aligned with supply,” Powell added. “That over time should bring inflation down.”