© Reuters. PHOTOGRAPHY: People standing in line in front of the newly opened Career Center for personal meetings in Louisville, USA, April 15, 2021. REUTERS / Amira Karaoud
(Reuters) – The number of Americans applying for unemployment benefits fell last week, the Labor Department said Thursday, not yet showing an impact on employment from the rise in coronavirus infections in the United States to a record high.
Initial claims for state unemployment benefits fell to seasonally adjusted 198,000 for the week ended Dec. 25 from a revised 206,000 a week earlier. Earlier this month, claims fell to the level last seen in 1969.
Economists polled by Reuters predicted 208,000 applications for the last week. Receivables fell from a record 6.149 million in early April 2020.
Demands typically increase during the colder months, but acute labor shortages have disrupted this seasonal pattern, resulting in lower seasonally adjusted numbers of requests in recent weeks. If we discount weekly volatility, the labor market tightens, with the unemployment rate at a 21-month low of 4.2%.
At the end of October, a record 11.0 million jobs were created. Higher wages as companies fight for scarce workers help support consumer spending.
The economy grew at a rate of 2.3% year on year in the third quarter, with consumer spending growing at a rate of 2.0%. Growth forecasts for the fourth quarter are as high as 7.2 percent. For the whole of 2021, economic growth is expected to be 5.6%, which would be the fastest since 1984, according to a Reuters economist survey. The economy shrank by 3.4 percent in 2020.
The question now is how sustainable this momentum can prove, given that the rapid spread of Omicron is bringing COVID-19 infections back to record highs, surpassing even last winter’s wave. In addition, the Biden administration’s $ 1.75 trillion domestic investment plan is stalled in the U.S. Senate.
Because of these uncertainties, some economists have begun lowering their growth estimates for next year.
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