The number of Americans filing for unemployment benefits last week fell to the lowest level in more than half a century, the latest sign the labor market is bouncing back from the coronavirus pandemic.
Figures released Wednesday by the Labor Department show that unemployment applications for the week ended Nov. 20 tumbled to 199,000 from a revised 270,000 last week, easily topping the 260,000 forecast by Refinitiv analysts.
It marked the best level of jobless claims since Nov. 15, 1969, when there were 197,000 applicants, and has fallen below the February 2020 pre-pandemic average of 211,700.
Continuing claims, or the number of Americans who are consecutively receiving unemployment aid, fell to 2.049 million, a decrease of 60,000 from the previous week. That is the lowest level for insured unemployment since March 14, 2020, when it was 1.77 million.
The report shows that roughly 2.4 million Americans were collecting jobless benefits for the week ending Nov. 6, a decrease of 752,390 from the previous week; by comparison, just a little over one year ago, an estimated 21.11 million Americans were receiving benefits.
While it's unclear what precipitated the stunning drop, economists said it could be evidence that employers – faced with an incredibly tight labor market – are curbing layoffs and making an effort to retain the workers they already have as a record number of employees quit their jobs in search of more money and greater flexibility.
"Layoffs are hitting new lows amid ongoing labor shortages as employers look to hold onto hard-to-find workers," said Daniel Zhao, chief economist at Glassdoor, wrote on Twitter. (Zhao also cautioned about making historical comparisons using jobless claims data due to changes in unemployment insurance programs over time regarding eligibility and other factors.)
The Labor Department reported earlier this month that there were 10.4 million open jobs at the end of September. Though little changed from the end of August, it's still a staggeringly high figure; there are about 3 million more open jobs than unemployed Americans looking for work.
Still, seasonal adjustments seemed to play some type of role in the better-than-expecting reading: Unadjusted claims totaled 258,622 – a 7.6% increase from the previous week.
"The drastic drop in weekly jobless claims reeks of seasonal adjustment noise, especially considering the unadjusted number rose by 18,000," said Robert Frick, corporate economist at Navy Federal Credit Union. "Especially with COVID-19 cases rising, a drop seven times the recent average seems highly unlikely."
A separate economic report released Wednesday morning by the Commerce Department showed that second-quarter GDP growth was revised up slightly to 2.1%. It was below Refinitiv estimates for 2.2%.