US labor market remains tight and layoffs are at nearly three-decade lows

US labor market remains tight and layoffs are at nearly three-decade lows

By Lucia Mutikani

WASHINGTON, Dec 2 (Reuters) – The number of Americans filing new jobless claims rose less than expected last week, pointing to tighter labor market conditions, while layoffs fell to a low of 28 and a half years in November.

Thursday’s weekly unemployment benefits report from the Department of Labor also showed that people who received aid fell below 2 million for the first time since the COVID-19 pandemic began in the United States more than 20 months ago.

The upbeat news on the job market added to strong consumer spending and manufacturing data to suggest the economy was picking up after hitting a slump in the third quarter. However, the omicron variant of the coronavirus puts the outlook at risk.

Federal Reserve Chairman Jerome Powell, in a nod to the strengthening economy, told lawmakers this week that the United States central bank should consider accelerating the rate at which it is reducing its bond purchases, at the meeting of December monetary policy.

“Companies are not laying off workers like they did during the recession,” said Christopher Rupkey, chief economist at FWDBONDS. “Powell was right in hinting that the Fed could accelerate the phase-down process because a tight labor market means that rising wage demands will fuel inflation.”

Initial claims for state unemployment benefits increased by 28,000 to 222,000 seasonally adjusted for the week ending November 27. The claims had dropped to 194,000 in the previous week, the lowest level since 1969.

Data tends to be volatile around Thanksgiving, the start of the holiday season. Economists polled by Reuters had forecast 240,000 requests for the past week.

Subsidy requests have fallen from a record 6.149 million in early April 2020. Unadjusted claims fell 41,622 to 211,896 last week.

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