“The remarkably low level of jobless claims is just one more indication of the current strength of the labor market and, more broadly, the economy.”
Initial claims for Americans applying for first-time unemployment insurance fell sharply to 220,000 for the week ended January 13, coming in far below expectations of 249,000. That result was the lowest level of claims since 1973.
In addition, the four-week moving average of jobless claims declined by 6,250 to 244,500, remaining near the 40-year low mark.
This morning’s release also marks the 150th consecutive week that jobless claims have been below 300,000, which is the longest streak since 1970 when the labor market was considerably smaller. Coupled with strong job creation and cyclically low unemployment, it’s clear that employers are positioning their payrolls for continued growth.
It’s worth noting that there is potentially some “noise” in these numbers coming so quickly on the heels of the holidays, with retailers having likely already completed most of their purge of seasonal workers. Even so, the core takeaway from the report doesn’t change.
Conditions are increasingly favorable for job-seekers, but also increasingly challenging for employers. The competition for talent is not cooling down, and with the economy showing signs of heating up, that appears unlikely to change any time soon.
Even as claims remain low, the number of job openings remains elevated as employers are increasingly facing a mismatch between their hiring needs and the availability of qualified candidates to fill those needs. There are already signs of increasing upward pressure on compensation costs. That is likely to prompt increased business investment as a means of spurring productivity, but should also prove beneficial to not only those looking for work, but those looking to change jobs – ultimately benefiting household income over time.
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