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US Jobless Claims Rise, While Layoffs Settled To Pre-Pandemic Levels

Jobless claims rose slightly in the past week according to labor reports, but layoffs dipped back to 2020 pre-pandemic lows. When the government forcibly shut down the economy in March 2020, many workers in client-facing industries like hospitality lost their jobs immediately. Now, as COVID fears start to gently fade, many people are getting back to work.

At a glance

  • U.S. jobless claims rose slightly but positive wage and unemployment numbers offset the damage
  • The country currently boasts near-record levels of available jobs for those seeking employment
  • Inflation continues to cast a shadow over all positive economic news thanks to record spikes in cost of goods and energy

According to the Labor Department, jobless claims for government benefits rose by 11,000 to 227,000 for the week ending March 5. First-time applications for jobless benefits typically track the pace of layoffs. additionally, the four-week average for claims, which gives a better view of the process minus volatility, rose by 500 to 230,750. The four-week moving average for that number is at its lowest level in more than 50 years.

Last week, the Labor Department happily reported a massive 50 percent increase in new jobs (678,000 total) over their estimates. As a result, the unemployment rate dropped to 3.8 percent, down from 4 percent in January.

A large number of employees quitting their jobs in favor of better paying opportunities mitigated the number of jobless claims

U.S. businesses also posted record levels of available jobs in the past few months as hiring returned in a big way. Employers posted 11.3 million jobs at the end of January, down slightly from a record of 11.4 million in December, the government reported Wednesday.

The amount of people quitting their jobs slipped to 4.25 million, down from 4.4 million. January’s figure is a step on the right direction, but is still 23 percent above pre-pandemic levels. Economists believe that millions of people are quitting in order to switch jobs for higher pay or remote benefits.

Average hourly pay increased 5.1 percent in February year over year, according to U.S. Labor statistics released in the last week. The rapid bump forces companies to either become more efficient or to raise prices to offset higher labor costs.

All of these positive numbers are overshadowed, though, by the staggering rise in inflationary figures in the past year. Because of irresponsible and rampant currency printing, cost of goods rose 7.9 percent in 2021 — the highest bump in decades. Many economists believe that the inflation is just beginning, too; given that current oil and gas spikes aren’t even figured into the equation. Once energy costs really hit company bottom lines, expect massive price increases on everything from food to housing.