The U.S. Department of Labor reported a bit of good news regarding the condition of the job market from last week. Jobless claims came in at a total of 232,000, which is slightly less than expected for the week of February 19. Dow Jones estimated that unemployment claims would be 235,000. The number of claims for last week are also 17,000 less than the week prior (February 12). Meanwhile, the economic growth by the end of 2021 actually turned out better than was originally reported.
And the good news doesn’t end there.
Other reports demonstrated that gross domestic product (GDP), which represents the total of goods and products that the U.S. economy produces, increased at a 7% annualized rate during the fourth quarter, per the Commerce Department. As for continuing jobless claims, this number dropped by 112,000 from the previous week, totaling 1.48 million.
Not surprisingly, the pandemic still plays a role in the number of jobless claims that Americans are reporting. As we continue further into 2022, more Covid-19 pandemic-associated jobless aid programs are beginning to expire. As a result, the number of individuals receiving benefits through government programs has decreased by 30,000 to 2.03 million.
“Despite the improved jobs picture, total employment level remains about 1.7 million below where it was in February 2020…” CNBC reported. The unemployment rate has fallen from a crisis peak of 14.7% to 4%.”
How Has the Pandemic Affected Jobless Claims?
For a while, jobless claims were on a steady downhill trend. For the majority of December 2021, the weekly number of unemployment claims was just 200,000 – incredibly low considering recent data. Of course, this was when we saw a jump in Covid cases. By January, we were seeing 168,409 daily cases of the virus.
“It is possible that the recent spread of COVID has put that earlier downward trend on hold,” said economist at JPMorgan in New York Daniel Silver at the time. “That said, it is an encouraging sign for the labor market that claims have not meaningfully jumped in response so far.”
“The rise in claims reflects both an increase in layoffs due to the surge in Covid cases as well as an added boost from large seasonal adjustment factors,” lead U.S. economist with Oxford Economics Vanden Houten added.
At the same time, wage rates have increased by 4.7 percent from December 2020 to December 2021. But, unfortunately, so did inflation, topping 7 percent.
“Broadly, the job market is still seen as tight while supply chain disruptions remain a major concern and irritant in this high inflation environment,” Bankrate senior economic analyst Mark Hamrick said. “Just a few weeks from now, we’ll learn whether the recent slowdown in hiring persists even as the nation’s unemployment rate has edged closer to the pre-pandemic low of 3.5 percent.”