New jobless claims likely set a new Pandemic-era low last week, underscoring the tight labor market conditions as initial unemployment claims near 2019 levels while job openings hold near record highs.
The Labor Department is due to release its jobless claims report on Wednesday, a day earlier than usual due to the Thanksgiving holiday. Here were the main metrics expected from the print, compared to consensus estimates compiled by Bloomberg:
The total number of new weekly filings likely fell to a new March 2020 low for a seventh week in a row. Initial filings came to well over 700,000. For new filings of approximately 220,000, claims are slightly higher than the weekly average for the year 2019.
The claims for regular state unemployment benefits have also drawn closer to pre-virus levels. The average claim for the month of March 2020 was about 1.7 million per week, after coming in at the lowest level since March 2020 last week.
If this week's jobless claims report comes in as expected with further improvement in both new and continuing claims, it would bode well for November's monthly jobs report from the Bureau of Labor Statistics. The claims report is due for release next week, and coincides with the survey week for that data. The unemployment rate dropped to 4.5% in November from 4.6% in October, with the non-farm payrolls increased by half a million in November.
The labor market has grown increasingly tight as the economic recovery progresses, as the past couple months' worth of jobless claims reports have offered a look at the labor market. The labor force participation rate hasn't returned to pre-pandemic levels, but the number of people rendered unemployed has fallen precipitously, with many employers incentivizing to keep their current workforces because of job openings and labor shortages across industries. As of September's end of September, the last job opening was reported at 10.4 million, with this sum dipping slightly from July's record high of more than 11 million.
Monetary policymakers have been dealt the delicate task of keeping employment growth high while keeping inflation from running too hot for too long. Federal Reserve Chair Jerome Powell, who was nominated to lead the central bank for another four-year term, suggested that supply-side constraints that present levels of elevated inflation will eventually start to ease.
In a note, Rubeela Farooqi, chief U.S. economist for High Frequency Economics, said in a note that policymakers will have to shift their focus from price pressures to a complete labor market recovery next year despite the fact that there will be a rise in interest rates.
Emily McCormick is a reporter for Yahoo Finance.