First-time unemployment filings fell sharply to reach their lowest level since 1969 in early December, coming in below 190,000. And even with the latest move higher, the four-week moving average for new claims — which smooths out volatility in the weekly data – came in at the lowest level since November 1969, dropping by 16,000 week-over-week to reach 203,750.
And continuing claims, while still somewhat above pre-pandemic levels, have also come down sharply from their pandemic-era high. This metric tracking the total number of individuals claiming benefits across regular state programs peaked at more than 23 million in May 2020, but came in below 2 million for a third straight week in this week’s report and reached the lowest level since March 2020.
The marked drop in new weekly jobless claims over the course of 2021 — and especially in the past several weeks — has served as one key indicator of the current tightness in the labor market.
But even as the rate of those newly unemployed per week sank to multi-decade lows, labor force participation has remained depressed compared to pre-virus levels, and job openings have held near record highs. The labor force participation rate last came in at 61.8% for November, or short of February 2020’s 63.3%, and the size of the civilian labor force was still down by 2.4 million.
“If we filled every single job opening that's out there right now, we'd have employment that was not just well above where we were pre-pandemic, but well above what anyone predicted pre-pandemic,” Betsey Stevenson, former Labor Department chief economist and professor of economics and public policy at the University of Michigan, told Yahoo Finance Live.
“That recovery and employers wanting to hire workers is there,” she added. “The challenge is that we still have just a lot of uncertainty going on in the labor market. A lot of what economists talk about is churn — people who are exiting jobs more frequently than they used to, exiting the labor market more frequently than they used to.”