After more than 20 months of pandemic, the labor market of USA reached a historic milestone. Requests for unemployment insurance Weekly rates fell to 199,000 last week after seasonal adjustments, their lowest level since 1969. They peaked at 6.15 million in April 2020.
So does this mean that employment conditions are back to normal? Not exactly.
“Although the drop in orders [de desemprego] is certainly welcome, it does not indicate a dramatic shift in the labor market,” said PNC chief economist Gus Faucher in a note to clients. “Orders are highly volatile, especially around the holidays.”
The reason the claims are so low may also be related to the ongoing distortions in the job market.
“Orders have been declining as employers maintain tight control over their employees because of labor shortages,” noted Peter Boockvar, chief investment officer at Bleakley Advisory Group.
Demand for workers is high, but the number of people actively seeking work has declined. In September, the number of people who left their jobs voluntarily rose to 4.4 million.
The US jobs report for November, due out this week, will be closely watched, especially as central banks assess their next steps.
Economists polled by Refinitiv are expecting more good news. They predict the economy has added 563,000 jobs, up from 531,000 in October.
The fee of unemployment should drop to 4.5%. It was at 3.5% in February 2020. That could give the Federal Reserve more room to reverse economic stimulus measures while trying to contain inflation without jeopardizing job returns.
In a research note published on Thursday (25), strategists at the Goldman Sachs predicted that the Fed would choose to accelerate the rate of reduction in asset purchases. They think the central bank will announce in December that it will cut bond buying by $30 billion a month starting in January.
This would allow the central bank to consider increasing the interest rates, which he said he will only do when the phasing out of assets is completed, as early as March. Goldman expects the Fed to wait until June, “when some additional employment reports will be available.”
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Reference: CNN Brasil
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