Applications for state unemployment benefits plunged to levels not seen since 1969 according to the latest figures from the US Department of Labor.
In the week ending November 20, the advance figure for seasonally adjusted initial claims was 199,000, a decrease of 71,000 from the previous week’s revised level.
This not only marks a return to pre-Covid-19 pandemic levels of claims, but it is also the lowest level of initial claims since 15 November 1969 when it was 197,000.
A Bloomberg survey of economists produced a median estimate of 260,000 applications.
However, seasonal adjustments around the Thanksgiving holiday contributed significantly to the bigger-than-expected drop. Unadjusted figures show claims actually ticked up by more than 18,000 to nearly 259,000.
The four-week average of claims, which smooths out weekly ups and downs, also fell — by 21,000 to just over 252,000, the lowest since mid-March 2020 when the pandemic slammed the economy.
Since topping 900,000 in early January, the number of applications has fallen steadily toward and now fallen below their pre-pandemic level of around 220,000 a week. Claims for jobless aid are a proxy for layoffs.
Overall, 2 million Americans were collecting traditional unemployment checks the week that ended 13 November, down slightly from the week before.
If claims are sustained at pre-pandemic levels, it would likely increase the chance that Federal Reserve officials accelerate their tapering of bond purchases and contemplate raising interest rates soon after that buying finishes in 2022.
The data follow reports showing the fastest inflation in three decades and a pickup in job gains in October, which have added to calls to accelerate this process.
While the October jobs report showed payrolls increased by 531,000, and economists predict another 500,000 to be added in November, millions of Americans are still choosing to not return to work.
Frustrated employers are desperate to fill positions and continue to offer incentives and more flexible working arrangements to try and entice people back to work.
Figures for November are expected on 3 December and will reveal whether their tactics are working, or whether the uptick in Covid cases in recent weeks is once again keeping people at home.
With reporting from the Associated Press