The number of Americans filing first-time claims for unemployment benefits fell sharply last week to a level not seen in half a century, the Labor Department reported on Thursday.
The reading of 184,000 was down 43,000 from the previous week’s revised level. Although the report follows the Thanksgiving week, it continues a trend of steadily declining numbers, which dropped below 200,000 in recent weeks.
Economists were expecting a reading in the 225,000 range, following the prior week’s revised 227,000.
The four-week moving average, meanwhile, was 218,750, a decrease of 21,250 from the prior level.
The decline in unemployment comes as the government reports there are 11 million open jobs, near a record, with fewer than one available worker for each position.
Tightness in the labor market is driving inflation, which is running at a 6.2% annual clip. Friday, the government will provide its latest estimate of consumer price inflation. Estimates are that it may have risen last month to 6.7%.
Laurence Ales, a professor of economics at Carnegie-Mellon University, says he expects the labor market to loosen somewhat next year with “an increase in both the willingness to participate in the labor market and less willingness to quit.”
In the meantime, companies struggle to fill positions while also dealing with a new threat in the form of the omicron variant of the coronavirus. Several large employers, including Ford and Google, have announced they are delaying the return to the office for their remote employees.
“We’re continuing to see a surge in job postings, record low unemployment rates and historically high levels of workers changing jobs and careers,” said Karen Fichuk, CEO of staffing firm Randstad North America. “Together these trends are creating new opportunities for workers, as smart employers cater to workers who have come to expect a better work-life balance, higher salaries, and more flexibility.”