In the week ending 4 December, 184,000 new claims for state unemployment benefits were filed, the fewest since 1969, the U.S. labor department reported, well below economists’ estimates averaging 220,000 in a Bloomberg survey.
The four-week moving average of new claims fell to 218,750, the lowest since March 2020.
At the same time, hiring was only moderate, with November’s job gains notching their fewest this year amid widespread labor and materials shortages, while inflation and a new COVID variant has left employers cautious about adding workers.
For the week ending 27 November, continuing claims for benefits rose by 38,000 to 1.99 million.
TRENDPOST: The low number of new jobless claims is good news only in part. In addition to more people working, the figure also reveals that a significant number of people are still sitting out the COVID War or have left the job market altogether.
The jobs “recovery” still leaves out millions of “used-to-be” workers.
The Great Resignation
Another 4.2 million people quit their jobs in October, the U.S. labor department said, about 205,000 fewer than in September but still just shy of that month’s record.
“It’s not just quitting for the sake of quitting,” Geoffrey Daco, chief U.S. economist at Oxford Economics, told The Wall Street Journal. “It’s quitting to find better employment.”
Meanwhile, open jobs rose by 254,000 to roughly 11 million, with lodging and food services posting most of the openings as those businesses continue to recover from 2020’s shutdown.
However, hiring in the hospitality industry has risen and fallen as the COVID virus has waxed and waned over recent months.
“The pickup [in hiring] seems to be driven by a slowdown in coronavirus cases,” Nick Bunker, Indeed Hiring Lab’s research director, said to the WSJ.
“Right now, we’re a labor market that is hot,” he noted, “and bargaining power is more tilted to job seekers than we’ve seen in the recent past.”
In some large urban areas, employers report difficulties hiring workers for less than $15 an hour, more than twice the federal minimum wage.
The average hourly compensation for nonsupervisory workers edged up 8 cents in November to $31.03, 4.3 cents higher than a year earlier, the Bureau of Labor Statistics said.
Wages and prices climbing together threaten to ignite a wage-price spiral, with each chasing the other higher.
The U.S. Federal Reserve continues to hold that inflation will sputter as supply-chain kinks are straightened out.
However, in Congressional testimony earlier this month, Fed chair Jerome Powell hinted that the central bank could wind down its monthly bond-buying program sooner than next summer so it could raise interest rates earlier than planned to lasso inflation.
The U.S. economy will average 300,000 to 350,000 new jobs each month in 2022, Oxford Economics’ Daco predicted.
TREND FORECAST: To attract workers back into the labor force and keep them there, employers will need to rethink the workplace and pay higher wages.
Workers will migrate to jobs with flexible hours and better benefits, profit sharing, career training, even participation in management.
TREND FORECAST: Workers’ new power, as with our Unionization trend, (see related story in Trends-Eye view) will begin to force changes in job structures and boundaries as well as in pay and benefits.
Although employers may resist such changes at first, those that accede to employees’ demands will find turnover fall and productivity increase.
As other companies see the benefits of redefining jobs, roles, and benefits, these changes gradually will become the workplace’s new normal.