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Tight Labor Market Ahead As Jobless Claims Fall to 54-Year Low

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young man in the office box is a very multitasking | Tight Labor Market Ahead As Jobless Claims Fall to 54-Year Low | featured

An already tight labor market is about to get even tighter. US jobless claims fell to a record low of 166,000 last week. According to the Department of Labor, this is the lowest number recorded since 1968.

RELATED: Americans Filing for Initial Jobless Claims Reach 286,000

Tight Labor Market Tightens Even Further

Group of demonstrators with banners protest for job and equal salaries | Tight Labor Market Tightens Even Further

The US’s tight labor market was further constricted last week. Initial jobless claims fell to their lowest levels since 1968.

The Labor Department reported that initial unemployment filings dropped to a new low of 166,000. This number is 34,000 lower than the Dow Jones estimate of 200,000. 

The 166,000 claims are also 5,000 lower than the previous week’s jobless claims. The Labor Department revised its calculations to provide a more accurate picture of the current situation.

It revised the claims numbers between 2017 to 2021. In addition, it also changed the seasonal factors used to calculate the numbers. As a result, last week’s total was the lowest since November 1968.

Tight Labor Market Leading to A Severe Worker Shortage

The low numbers of new jobless claims suggest a tight labor market about to get even tighter. This can lead to a severe worker shortage in the next few months.

Right now, the US has five million more job openings than there are unemployed workers. This situation is driving up demand, pushing companies to offer higher wages. Consequently, higher wages contribute to rising inflation. 

Meanwhile, continuing jobless claims rose to 1.52 million. American workers receiving benefits under all programs shrank to 1.72 million.

In contrast, 18.4 million workers collected unemployment benefits during this same time last year. At that time, the federal government supported jobless Americans with enhanced benefits. 

Federal Reserve Raises Interest Rates To Counter Rising Inflation

To counter the effects of inflation, Federal Reserve officials started raising interest rates. The agency hopes to dampen demand by making it more expensive to borrow money.

However, hiring continues to operate at a brisk pace. Despite the economic crunch, nonfarm payrolls increased by 1.7 million during the first quarter of 2022. 

Even with the Fed’s initial salvo, inflation continues to rage on. The agency already made clear that it will continue to raise interest rates up to six more times later this year.

However, minutes from their previous meeting indicated a more aggressive approach. Instead of the anticipated quarter-point increases, the Fed will likely implement half-point interest rate hikes this year. 

Inflation Rages On

The inflation rate ballooned to 7.9% in February 2022 compared to year-ago levels. Sharp increases in the prices of food, fuel, and utilities are nullifying any wage increases American lately received.

Experts project the March inflation rate to end at 8.5%. Additional disruptions like the Russia-Ukraine war and the global oil supply crunch are adding more fuel to the fire.

In addition, Federal Reserve policymakers are projecting that inflation will end up at 4.3% through 2022.

Watch the CNBC Television news video reporting that US weekly jobless claims fall well below estimates to 166,000:

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What do you think of the tight labor market happening in the US right now? Will the competition to hire workers to lead to bigger wages and more inflation? Or, will current hiring rates keep the US economy afloat?

Let us know what you think. Share your comments below.

2 Comments

2 Comments

  • gary holman says:

    Our government always said their is profit in war so no surprise Biden is supporting Ukraine-Yes they need help but Biden with his sanctions is only hurting Americans-Price of food fuel and everything else doubles and triples- Biden is leading the band to help Ukraine so where is the rest of the world-They are still doing business with Russia- If we are short truck drivers use resources right here at home the military has reserves right here-When the pilot’s went on strike for airlines the government said fine don’t work and the national guard took over and the pilots went to work-Instead the government pays people not to work-Federal pay and unemployment pays more than they make to work-People like us on social security get nothing-If social security goes up Medicare goes up as well -Obama said he gave the biggest raise in history to social security but also raised Medicare to get it back-He didn’t mention that-I got $1.00 a month raise and my wife got $0.00 but her Medicare went up-Our government is not working with the people but only among themselves- If a company is failing don’t ask the people causing the failure ask the employees-Our government could care less what people want-Washington treats the people like children and tells them what they are going to do-Washington politicians are fools and liers and thieves and when it gets out to the public they get swept under a rug and the move to another position-The government runs the media- can u figure it out?

  • Thomas meyer says:

    I feel in my spirit the democracy of Bidens administration has done all this on purpose to destroy the American people and to lead us into the new world order which is going to take away our freedoms. We must come together and impeach Biden and Kamala for treason to the United States of America. They have caused more damage in fourteen months than the last forty years. their goal is to destroy the U.S, not to fix our nation. Americans are awaking to their lies and deception. It’ evident they stole the election. We must IMPEACH. Impeach them now Congressmen do your job, we cannot permit them to destroy our freedoms and constitution!!!

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