The number of new applications for unemployment benefits fell by 28,000 last week to 187,000, the lowest level for initial claims since September 1969.
Weekly jobless claims are seen as a proxy for layoffs and have been watched closely in recent weeks as the Federal Reserve hiked its interest rate target. This week’s decline continues a generally downward trend in jobless claim reports since the omicron variant peaked in mid-January.
The general trend of declining layoffs is a good economic sign for President Joe Biden, who has been staring down low approval ratings and displeasure with how his administration has handled the country’s burgeoning inflation. It also gives the Federal Reserve, which just raised interest rates for the first time in years, confidence in its plan to tighten monetary policy.
“It’s an excellent time to be looking for work since the labor market is tight, wages are rising, and workers have negotiating power in many industries. We recently found that 51% of the workforce is somewhat or very likely to look for a new job in the next 12 months,” said Ted Rossman, senior industry analyst at Bankrate.
New jobless claims have been in a steady retreat over the last year. Around this time in March 2021, new claims were averaging more than 700,000 per week. Even during this year’s COVID-19 surge with the omicron variant, jobless claims only ticked up slightly, showing strength in the economic recovery.
President Joe Biden celebrated Thursday’s positive jobless claim numbers in a statement released by the White House, saying that people are getting back to work “at a historic pace.”
“This historic progress is no accident: it’s the result of an economic strategy to grow the economy from the bottom up and middle out, starting with the American Rescue Plan,” he said in reference to the Democratic COVID-19 relief legislation passed last year.
The central bank announced it would raise its interest rate target by a quarter of a percentage point in an effort to curb soaring inflation, a major step away from its pandemic-era emergency policies. The quarter-point hike was more modest than the half-point raise some economists were hoping to see.
Inflation has been the biggest economic problem plaguing the country. Consumer prices rose 7.9% for the 12 months using February, the fastest rate of increase since 1982.