Jobless Claims Are Stabilizing at Pre-Pandemic Levels

Unemployment claims have been steadily falling this year as the labor market has tightened. They are now roughly at levels last seen before the pandemic caused layoffs to surge in March 2020. Claims averaged 218,000 a week in 2019, the year before the pandemic hit the U.S.

The decline in new claims is an indication that employers are reluctant to lay off workers at a time when jobs are plentiful, consumer demand is high and the pool of prospective workers remains lower than before the pandemic.

Employers have been offering higher wages and increased benefits to attract workers. Hourly private sector wages were up 4.8% in November from the previous year, the Labor Department said Friday, the same level as in October and well above where they were before the pandemic.

There were 11 million job openings in October, up from 10.6 million in September, according to the Labor Department. By contrast there were 7.4 million unemployed workers that month, a sign of the tight labor market.

Layoffs held steady at 1.4 million in October, the department said.

“The overriding dynamic in the job market of late has been this shortage of workers,” said Mark Hamrick, senior economic analyst at Bankrate. “The issue of fresh job loss has not been key for many months now.”

The unemployment rate fell to 4.2% in November from 4.6% in October, the Labor Department reported Friday. The share of people ages 25 to 54 who are either working or looking for work rose to 82.1% from 81.9%, a sign that prime-age Americans are starting to get back into the labor force. But the labor-force participation rate for that age group remains below where it was in February 2020, when it stood at 83.1%.

Despite the recent gains, the labor market still has room to recover. As of November, there were 3.9 million fewer jobs than in February 2020, before the pandemic disrupted the economy. And there were 2.4 million fewer people in the workforce.

“We know that the job market is not going to look like it did exactly before the pandemic,” said Mr. Hamrick. “But I think it’s important to note that there’s been substantial healing.”

Write to David Harrison at [email protected]