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U.S. State claims for unemployment benefits bumped up by 23,000 in the most recent week to 248,000, disappointing economists polled by Reuters, who had forecast 219,000 new applications.
New claims had been decreasing since mid-January as reports of new Omicron cases declined, plummeting from 700,000 a day then to under 145,000 in the most recent week for which jobless claims were reported, according to Reuters.
New weekly claims for unemployment payments peaked at 6.1 million in April 2020.
The U.S. economy posted a record 10.9 million open jobs at the end of 2021.
In January, 467,000 new jobs were created, reflecting “an overall low level of layoffs as businesses struggle to reach desired levels of employment,” Citigroup economist Veronica Clark told Reuters.
“While some level of labor market churn should continue in the near term, we would not be surprised to see claims fall even further below pre-[COVID] levels in the coming months,” she said.
In the U.S. Federal Reserve’s January meeting, “many” Fed officials “viewed labor market conditions as being at or very close to those consistent with maximum employment,” the meeting’s minutes reported.
TREND FORECAST: The higher interest rates rise, the faster the economy will contract and the higher the unemployment rates will climb.
In the short term, with the Omicron variant receding and no new virulent COVID variation appearing so far to replace it, and governments winding down the COVID War, the jobs market will stabilize at, or close to, what the Fed terms “maximum employment.”
However, almost two million pre-COVID workers remain jobless with the economy offering around 10 million jobs.
The horde of unfilled jobs, and workers lacking the skills or interest to take them, will continue to speed automation of routine tasks and direct schools and employers to create new job-readiness and job-training programs.
Widespread adoption of such training programs could reduce the number of people whose lack of skills consigns them to a permanent underclass that has no options but to change sheets in hotels or work the fryer in fast-food joints.