"Initial claims for Americans applying for first-time unemployment insurance were virtually unchanged for the week ended January 27, dipping by 1,000 to 230,000."
The four-week moving average declined by 5,000 to 234,500, lingering near the 40-year low mark. Current claims remain below 300,000, a threshold generally indicative of a healthy labor market.
This morning’s release also marks the 152nd consecutive week that jobless claims have held below 300,000, which is the longest such 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.
Even as jobless claims remain low, the number of job openings remains elevated. The strength of the economy is driving demand, while the untapped reservoir of unemployed or underemployed skilled workers that existed in the aftermath of the recession has largely disappeared. Instead, employers are finding it more difficult to find potential workers, particularly those with the skills that they need.
On top of that, indications that worker productivity stalled in the fourth quarter is a source of additional pressure on employers looking to expand. Further investment in worker training may be necessary, but will also likely contribute to investment in automation to increase business efficiency and output.
While the overall labor market picture for workers is very good, long absent from the recovery has been a meaningful acceleration in wage growth. There have been a number of “false starts” in recent years as evidence of strengthening wage growth might emerge temporarily, but with momentum failing to build.
Some data again suggests that wage pressures are gathering steam; that stands to reason given the strength of the economy and the tightness in labor markets. One-time bonus payouts by a number of large corporations in recent weeks may temporarily distort wage data in the near term, but it appears that the competition for workers should continue, ultimately forcing employers to ante up to retain and attract talent.
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