U.S. weekly jobless claims drop to lowest level since 1969 By Reuters

WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits dropped to the lowest level in more than 52 years last week as labor market conditions continued to tighten amid an acute shortage of workers.

Initial claims for state unemployment benefits tumbled 43,000 to a seasonally adjusted 184,000 for the week ended Dec. 4, the Labor Department said on Thursday. The drop to the lowest level since September 1969 was, however, likely exaggerated by difficulties adjusting the data for seasonal fluctuations.

Economists polled by Reuters had forecast 215,000 applications for the latest week. Claims have declined from a record high of 6.149 million in early April of 2020.

Applications typically increase as the weather gets colder, but economists say this seasonal pattern is unlikely to hold because of a tightening labor market.

There were 11 million unfilled jobs at the end of October, leaving employers reluctant to let workers go.

“Volatility due to seasonal patterns will make jobless claims data hard to interpret over the coming weeks,” said Veronica Clark, an economist at Citigroup (NYSE:) in New York.

Nevertheless, the claims data is consistent with other reports on consumer spending, manufacturing and services industries activity that have suggested the economy was regaining steam in the fourth quarter after a lull in the July-September period.

But the spread of the Omicron variant of COVID-19 poses a risk to the economic outlook. While little is known about the impact of the new variant, some slowdown in hiring and demand for services is likely, based on the experience with the Delta variant, which was responsible for the slowest economic growth pace in more than a year last quarter.

The government reported last week that the unemployment rate dropped to a 21-year low of 4.2% in November, while nonfarm payrolls increased by 210,000 jobs, the fewest since last December.