New weekly jobless claims dipped last week, returning to a downward trend following a brief spike higher.
The Labor Department released its latest weekly jobless claims report Thursday at 8:30 a.m. ET. Here were the main metrics expected from the print, compared to consensus estimates compiled by Bloomberg:
Initial jobless claims, week ended Feb. 24: 232,000 vs. 235,000 expected, 248,000 during prior week
Continuing claims, week ended Feb. 12: 1.476 million vs. 1.580 million expected, 1.593 million during prior week
During the prior week, jobless claims posted their first increase following three straight weeks of declines, with labor market data still coming in choppily in the wake of the jump in Omicron cases at the start of the year. Still, claims have continued to come in just marginally above their pre-pandemic levels, as jobless claims averaged around 220,000 throughout 2019. Continuing claims for regular state benefits have also now come in below 2019’s levels of around 1.699 million on a weekly basis.
But the jobless claims data belies the tightness of the labor market, which has been more evident in data on job openings. Vacancies have remained near record levels, underscoring employers’ widespread desire to bring on more workers to keep pace with elevated consumer demand.
“Ongoing issues with labor supply has led companies to increase retention rates, which has contributed to the low level of jobless claims,” Bank of America economists wrote in a note published Friday. “We expect this to persist over the course of the year.”
As of Feb. 18, job postings on Indeed — one metric of worker demand — came in 60.4% above pre-pandemic levels from Feb. 1, 2020. And new job postings up on the site for seven days or less were up by 83.9% compared to pre-pandemic levels, suggesting demand was rebounding even more strongly following a brief dip in January due to renewed virus-related restrictions during the Omicron surge.
Though widespread job openings have created considerable leverage for workers, persistent vacancies have created additional concerns around inflation as competition for workers drives compensation costs higher. Average hourly earnings last grew by 5.7% on a year-over-year basis in January, according to the Labor Department’s monthly jobs report, though this was dwarfed by the 7.5% year-on-year rise in consumer prices for the same month.
“Continued tightness in the labor market indicates that upward pressure on wages and other employment compensation is not likely to moderate soon,” Federal Reserve Governor Michelle Bowman said in a speech this week. “Even with the improving labor market, I still hear from businesses that qualified workers are difficult to find, and labor shortages remain a drag on hiring and on economic growth.”
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck