Weekly claims for first-time unemployment benefits dropped to the lowest level in 52 years amid a drop in layoffs and a persistent shortage of workers.
Weekly unemployment claims drops to lowest level in 52 years
In the midst of the massive labor shortage in the United States, weekly jobless claims have dropped to their lowest level in 52 years.
Job openings reached a near-record of 10.4 million in September, CBS reported.
The Department of Labor released the latest unemployment figures on Wednesday showing the total number of new filings last week for jobless benefits totaled 199,000, the lowest recorded number since November 15, 1969, when unemployment claims totaled 197,000, CNBC reported.
The report came in under the Dow Jones estimate of 260,000 unemployment filings and below those of the previous week which were 270,000.
Unemployment dips slightly
The latest US Bureau of Labor Statistics reported on Friday, November 5, 2021, that unemployment fell to 4.6 percent, a drop of 0.2 percentage points. It’s nearly 2 points lower than November 2020, when unemployment stood at 6.7 percent, according to Statista.
Employers added 531,000 jobs in October. Currently, the economy is still short by roughly 4 million jobs, NBC reported.
Federal unemployment supplement ended in September
Prior to September 6, the federal government supplemented state unemployment insurance programs with an additional payment of $300 per week. Additionally, the federal government also extended unemployment benefits to gig workers or any individuals who were out of work for six months or more as part of pandemic aid.
What’s behind the drop? The great resignation?
There is a lot of speculation behind the drop in unemployment claims. While a decrease in layoffs amid a labor shortage is clearly a contributor, another possibility is that some workers have simply stopped looking.
However, another factor is workers who have decided to quit in the so-called “great resignation”. Workers who voluntarily resign are not eligible for unemployment benefits.
In July, 4 million Americans quit their jobs, Harvard Business Review (HBR) reported. In August, a record 4.3 million workers quit their jobs,” CNBC reported. Another 4.4 million resigned in September, according to CNBC.
Although typically, the highest turnover rate is among younger employees, HBR reported that the greatest increase in resignation rates occurred among employees between 30 and 45 years old, an amount that increased over 20% between 2020 and 2021.
