As the whispers of the ‘Great Resignation‘ became loud chatter, many companies reconsidered the benefits they provide as they try to retain staff.
With this backdrop, many in the US will have been surprised to find that the Labor Department discovered that people submitting jobless claims fell to its lowest level in more than 52 years last week.
As of last week, there are 199,000 people applying for jobless claims, a decrease of 71,000 from the previous week’s revised level. This is the lowest figure since 1969 when the figure was 197,000. With this in mind, businesses may reconsider their initial concerns about job losses.
Mohamed A. El-Erain, president at Queens’ College Cambridge University and advisor to Allianz and Gramercy, reported on the news:
Good news for the #economy:
Weekly initial jobless claims for the US came in at 199,000–the lowest since 1969 and comfortably better than the median forecast of 260,000.
The big question for the labor market remains the scope for increasing labor force participation.#employment pic.twitter.com/bYfh084iEU
— Mohamed A. El-Erian (@elerianm) November 24, 2021
Nonetheless, the economy looks set to remain fickle.
The US economy
It appears that estimates of job uptake and economic success have been harsher than reality. For example, Dow Jones estimated there would be 260,000 jobless claims.
In terms of the US economy, it grew by 2.1% in the third quarter of this year which was slightly higher than the 2% increase estimated a month ago, according to the US Commerce Department’s Bureau of Economic Analysis.
The decline in jobless claims appears to have occurred in correlation with seasonal change and people’s need for income.
Continuing jobless claims also saw a drop of 60,000 last week and it is now at a total of 2.05 million people. This is the lowest number that has been seen during the pandemic.
All in all, those making benefit claims fell by 752,390 to 2.43 million as of 6 November.
The Commerce Department also found that there were significant increases in wages, totaling $301.1 billion this is more than 50% from the original estimate.
This will undoubtedly be a result of companies increasing the pay offered with jobs in an effort to retain talent.
Unadjusted claims totaled 258,622, which actually was an increase of 7.6% from the previous week.
On the back of growing wages and declining unemployment, some in the US may feel it’s time to say goodbye to crisis-level policies.
However, businesses will need to keep in mind that unadjusted jobless claims totaled 258,622, which actually was an increase of 7.6% from the previous week. Additionally, as seasons change the desire to work may also shift.
On the back of this, many companies will intend to keep the benefits they have put in place to attract employees as they attempt to keep them long-term.