The number of Americans filing new claims for unemployment benefits reported a decline last week based on data from the Department of Labor on Thursday. With this it can be said that this latest data which has yet to show an impact on the job market due to the surge of Covid-19 infections especially the Omicron variant.
Preliminary claims for American unemployment benefits fell to 198,000 for the week ended Dec. 25 from a revised reading of 206,000 for the previous week. Earlier this month, jobless claims fell to levels recorded in 1969.
This reading is also much better than what economists are targeting where they are targeting a reading of 208,000. Overall the number of claims has dropped from a record high recorded in April 2020 of 6.149 million.
Applications typically increase during the winter, however the shortage of workers has disrupted employment development patterns, resulting in a lower number of seasonal adjustment claims in recent weeks. On the positive side, the unemployment rate is at its lowest level in 21 months at 4.2%.
On the other hand, the economy expanded at an annual rate of 2.3% in the third quarter, with consumer spending increasing at a rate of 2.0%. The growth forecast for the fourth quarter is as high as 7.2%. For the whole of 2021, the economy is expected to grow 5.6%, which will be the fastest since 1984.
The recent proliferation of the Omicron Covid-19 variant has caused concern among market players. The question of whether this variant could have an impact on the economy continues to play out. However, the latest data brings more confidence to investors and traders.
