Jobless Claims Come in at Highest Mark Since January
May 19, 2022 – The Labor Department reported that 218,000 Americans have filed new claims for state unemployment benefits, an increase of 21,000 from the previous week’s revised level. The previous week’s level was revised down by 6,000 from 203,000 to 197,000. The four-week moving average was 199,500, an increase of 8,250 from the previous week’s revised average. The previous week’s average was revised down by 1,500 from 192,750 to 191,250.
The advance seasonally adjusted insured unemployment rate was 0.9 percent for the week, a decrease of 0.1 percentage point from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week was 1,317,000, a decrease of 25,000 from the previous week’s revised level. This is the lowest level for insured unemployment since Dec. 27, 1969 when it was 1,304,000. The previous week’s level was revised down by 1,000 from 1,343,000 to 1,342,000. The four-week moving average was 1,362,250, a decrease of 22,500 from the previous week’s revised average. This is the lowest level for this average since Jan. 24, 1970 when it was 1,361,000. The previous week’s average was revised down by 250 from 1,385,000 to 1,384,750.
There were a record 11.5 million job openings at the end of March. Claims are down from an all-time high of 6.137 million in early April 2020.
Economists are watching closely, however, because jobless claims typically start to rise before a recession. There’s growing worry that a downturn is possible with the Federal Reserve raising interest rates to try to tame the worst inflation in 40 years.
Shortages Still a Problem
“With labor shortages still a persistent problem, we don’t expect layoffs will be widespread, although job losses in the tech sector appear to be increasing,” said lead U.S. economist Nancy Vanden Houten at Oxford Economics.
”Recent layoff announcement merit watching for a shift in business hiring
decisions,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
“Claims have been rising since mid-March and can double before we even get to prior-period cycle lows,” DataTrek analysts Nick Colas and Jessica Rabe said in a morning note, pointing out employment growth tends to slow as interest rates go up and saying hiring could slow down as soon as this year. “While the Fed won’t say it, incremental joblessness is an inevitable outcome of current policy.”
Federal Reserve chair Jerome Powell reiterated his assessment of the labor market’s strength earlier this month, just days after calling the current job market “tight to an unhealthy level” in his post-Fed meeting press conference last week. “The labor market has substantial momentum. Employment growth powered through the difficult Omicron wave, adding 1.75 million jobs over the past three months,” Mr. Powell said in a recent speech. “By many measures, the labor market is extremely tight, significantly tighter than the very strong job market just before the pandemic.”
Strong hiring optimism continued into the second quarter of 2022, according to the Q2 ManpowerGroup Employment Outlook Survey of 41,000 employers. Employers in 36 of 40 countries reported stronger hiring intentions than this time last year with greatest demand in IT, finance, and manufacturing. Demand for skilled workers remains at record highs as employers seek to attract and retain the best, diverse talent as employers embrace the post-pandemic era.
Working from Home and Adjusting to the New Normal for Businesses
Remote work is perhaps the most significant change to the world of work brought about by the pandemic. Yet too few businesses have adjusted—or even considered—their culture accordingly, says Alyssa Gruber of Hudson Gate Partners in a new report.
“Labor markets around the world are looking strong for Q2, with hiring outlooks back at pre-pandemic levels in most countries,” said Jonas Prising, chairman and CEO of ManpowerGroup. “Any impact of the Ukraine crisis is not reflected in employer hiring intentions. While Poland and neighboring countries are dealing with the humanitarian crisis, we must be poised to help resettlement and employment efforts for refugees, adapting roles and requirements to fill vacancies and create new opportunities.”
“At ManpowerGroup we are working fast to leverage our experience integrating refugees into labor markets from other countries – for example from Syria to Germany, Afghanistan to U.S. – and to adapt and scale reskilling and upskilling programs specifically targeted to this population,” said Mr. Prising. “Now is the time for collaboration between employers and governments to make it as fast and simple as possible to integrate refugees into the workforce so they can earn a living, contribute to society, and most importantly feel welcomed in their new surroundings.”
Related: Major Paradigm Shifts Coming Out of the Coronavirus Crisis
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media