New applications for U.S. unemployment benefits rose slightly last week, indicating a strong labor market in which employers are holding on to their workers amid high demand.
Initial jobless claims, a proxy for layoffs, rose by 14,000 to a seasonally adjusted 202,000 last week, the Labor Department said Thursday, up from the week before when they reached a revised 188,000, matching the lowest level in more than 52 years reached back in December. The four-week moving average, which smooths out volatility, decreased to 208,500 from a revised 212,000.
Continuing claims, a proxy for the total number of people receiving payments from state unemployment programs, moved slightly down to 1.3 million for the week ended March 19 from the previous week. Continuing claims are reported with a one-week lag.
“There’s a lot of momentum in the job market,” said Robert Frick, corporate economist at Navy Federal Credit Union. “Things are starting to ease because hiring is accelerating but from an employee point of view, these are great times.”
Employers had 11.3 million job openings in February, slightly below December’s record 11.4 million openings, the Labor Department said this week. Some economists have pointed to signs that the demand for workers has leveled off, although at a high level, because job openings have stopped rising and wage growth is cooling.
Employers added more than a million jobs in the first two months of the year, despite the rise in Covid-19 cases related to the Omicron variant.
The U.S. had 2.1 million fewer jobs in February of this year than it had in February 2020, before the pandemic hit the economy.
Payrolls should return to their prepandemic level in the next four or five months, if hiring continues at the recent rate, Mr. Frick said.
The Labor Department’s March employment report, which is set to be released Friday, will reveal further detail about hiring and wage growth, and both are expected to have remained strong.
Economists surveyed by The Wall Street Journal estimate that employers added 490,000 jobs in March, down from the 678,000 gained in February. They estimate that average hourly earnings jumped 0.4% in March from the prior month, when wage growth was essentially flat.
Employers should find hiring becoming easier in coming months as some workers become less selective about the kinds of jobs they want, said Dimitri B. Papadimitriou, an economist at Bard College.
“This is the time for workers to have their choices fulfilled—if they can be fulfilled,” Mr. Papadimitriou said. “It won’t continue to work for much longer because they’ll have to go back to work eventually.”
Mr. Papadimitriou said that some workers have resisted taking jobs in consumer services sectors such as leisure and hospitality because of a lack of flexibility. There were 1.7 million available jobs in that sector in February, the second-highest level after a peak in December, when there were about 2 million.
“In those kinds of jobs, there is not much flexibility and people want to be flexible, but at least the regime of wages has been raised there,” Mr. Papadimitriou said.
Write to Bryan Mena at [email protected]
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