U.S. unemployment claims have dropped to the lowest level since 1969 Unemployment News

If claims persist at pre-pandemic levels, it is likely that the Federal Reserve would reduce its bond purchases and increase its chances of raising interest rates.

Claims for U.S. state unemployment benefits plunged last week to an unprecedented level since 1969, which, if maintained, would mark the next milestone in the uneven recovery of the labor market.

Initial unemployment claims in regular state programs fell by 71,000 in the week ending Nov. 20, adjusting to 199,000, according to Department of Labor data on Wednesday. The average estimate from a survey of economists at Bloomberg called for 260,000 requests.

However, a larger-than-expected decline may explain how the government is adjusting raw data for seasonal changes. Wrightson ICAP chief economist Lou Crandall said in a recent note that seasonal factors predicted a smaller rise in unadjusted claims compared to the same period last year as it struggled to revive the labor market.

“This is a pure distortion of seasonal factors. He’ll be back a lot next week, ”Crandall said after his release.

Prior to the seasonal adjustments, last week’s unemployment claims rose by about 18,000.

U.S. stock index futures maintained losses, and the Treasury fell after a separate report on unemployment data and a drop in durable goods demand from the previous month. The Bloomberg dollar index rose.

If claims persist around the pre-pandemic level, it is likely that Federal Reserve officials would increase their chances of reducing bond purchases and expect interest rates to rise as soon as the purchase is completed in 2022. The data follows reports showing the fastest inflation. three decades and a rise in employment in October.

Claims ranged from 216,000 at the end of February 2020 to the appearance of Covid-19 in the U.S., which pushed orders to a peak of 6.1 million in early April 2020. Since then, they have gone downhill as the economy opened up and Americans returned to work. In addition, the federal pandemic unemployment benefits ended Sept. 6 in all states.

However, millions of Americans are still choosing to sit on the sidelines, frustrating employers who are desperate to fill an almost record number of positions. Child care remains a serious problem for working parents, especially because Covid’s cases are growing again in many states and disrupting their own learning.

October job reports saw payrolls grow by 531,000 over the past two months following major upward revisions. Economists are demanding an increase of another half a million in November, which will be announced on 3 December.