New applications for U.S. unemployment benefits fell slightly last week as employers stuck with their workers in a tight labor market.
Initial unemployment claims, a proxy for layoffs, fell to 180,000 last week from the previous week’s revised level, the Department of Labor said Thursday.
Applications for the unemployed have remained close to historic lows since the end of 2021. The four-week average for claims, which evens out volatility, rose higher to 179,750 from the previous week’s revised 177,500. The four-week average reached its lowest point ever this month at 170,500.
Continued claims, a proxy for the total number of people receiving payments from state unemployment programs, dropped to 1.4 million for the week ending April 16, from the previous week’s level. Continued injuries are reported with a one week delay.
Other signs show that the US labor market has been strong.
Employers have added an average of 600,000 jobs a month over the past six months, and the unemployment rate fell to 3.6% last month, almost equal to the lowest in half a century that reached just before the pandemic.
Some economists have also described the labor market in a negative light. Federal Reserve Chairman Jerome Powell said the U.S. labor market is “tight to an unhealthy level” at a news conference last month, citing many employers’ difficulties in finding labor.
The labor force participation rate – the proportion of the population aged 15 to 64 who are employed or looking for work – remained below pre-pandemic levels in March, and there were almost two job openings for each unemployed person at the beginning of the year, according to the Ministry of Labor.
“The labor market at the moment is even tighter than it was before the pandemic,” said Carl Tannenbaum, chief economist at financial firm Northern Trust..
The mismatch between job vacancies and the skills workers have or where they live has contributed to the tightness of the labor market, Mr Tannenbaum said.
“There is clear evidence that much of the help sought is not well matched with the help available. Many of the people who are still not working came from relatively low-paid occupations,” Mr Tannenbaum said. you were auditioning for spare parts and waiting tables in Manhattan before the pandemic, then shut down the entertainment and restaurant industry, you would have moved. “
The tight labor market has also pushed up wages. The average hourly wage for private sector workers rose 5.6% from a year earlier, a much faster cut than before the pandemic, according to the Labor Department.
Nevertheless, wage increases follow the growth in consumer prices, which was 8.5% higher last month compared to a year ago.
“Although wages have already grown quite rapidly, in some sectors they need to grow even more to ease some of the pressure on the labor market,” Mr Tannenbaum said.
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