New applications for U.S. unemployment benefits fell slightly last week as employers held on to their workers in a tight labor market.
Initial jobless claims, a proxy for layoffs, decreased to 180,000 last week from the previous week’s revised level, the Labor Department said Thursday.
Jobless claims have remained near historic lows since late 2021. The four-week average for claims, which smooths out volatility, inched higher to 179,750 from the previous week’s revised 177,500. The four-week average reached its lowest point ever this month, at 170,500.
Continuing claims, a proxy for the total number of people receiving payments from state unemployment programs, declined to 1.4 million for the week ended April 16 from the previous week’s level. Continuing claims are reported with a one-week lag.
Other signs show the U.S. labor market has been on strong footing.
Employers have added an average of 600,000 jobs a month over the past six months and the unemployment rate fell to 3.6% last month, almost matching the half-century low reached right before the pandemic.
Some economists have also described the labor market in a negative light. Federal Reserve Chairman
said the U.S. labor market is “tight to an unhealthy level” in a news conference last month, referring to many employers’ difficulty finding workers.
The labor-force participation rate—the share of the population ages 15 to 64 employed or seeking work—remained below prepandemic levels in March and there were nearly two job openings for every unemployed person in the beginning of the year, according to the Labor Department.
“The labor market at the moment is even tighter than it was prior to the pandemic,” said
chief economist at financial services company
The mismatch between available jobs and the skills workers have or where they live has been contributing to the tightness in the labor market, Mr. Tannenbaum said.
“There is definitely evidence that a lot of the help wanted is not well matched with the help that’s available. Many of the folks who are still not working came from relatively low wage professions,” Mr. Tannenbaum said. “If you were auditioning for parts and waiting tables in Manhattan before the pandemic, then the entertainment and restaurant industry shut down, you would have moved.”
The tight labor market has also pushed up wages. Average hourly earnings for private-sector workers rose 5.6% in March from a year earlier, a much faster clip than before the pandemic, according to the Labor Department.
Still, wage gains trail behind the growth of consumer prices, which were 8.5% higher last month compared with a year ago.
“Even though wages have already been growing pretty rapidly, in some sectors they need to grow even further in order to ease some of the pressure on the labor market,” Mr. Tannenbaum said.
Write to Bryan Mena at [email protected]
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