The U.S. Department of Labor (DOL) reported that approximately 207,000 people filed for first-time unemployment benefits in the week ending January 1, 2022. Unemployment claims remain near a 52-year low, holding below pre-pandemic levels. About 198,000 people filed for unemployment insurance benefits in the previous week, a low not seen since October 1969.
The number of people quitting their jobs remains historically high, and job openings continue to reach record levels. In October, job openings swelled, totaling 11.03 million. Conversely, hiring decreased, suggesting that the ongoing worker shortage remains an issue.
“Under normal circumstances, a near-record number of job openings would be something worth celebrating,” Jennifer Lee, a senior economist at BMO Capital Markets in Toronto told Reuters, ” But no employer is in a celebratory mood. It is difficult to fill orders or meet customer demands if there are not enough people to do the actual work.”
Labor Department data shows that there were 1.5 available jobs for each unemployed person as of October. This is the most on record in at least 20 years.
The struggle to fill open positions is driving employers to seek ways to attract new employees and keep their current staff. Many large businesses are increasing wages and offering bonuses or other incentives to new hires. Because of this, people are leaving low-paying positions for jobs with higher wages, better benefits and other perks.
In addition, many parents are choosing not to return to work. Experts say that about one-third of all mothers have scaled back, left their jobs or planned to resign since March 2020. Other people are leaving their positions for more flexible prospects, such as remote positions, freelancing, gig work or self-employment opportunities.
“While the latest data should be taken with a grain of salt given seasonal adjustments, we may be entering a stretch when lower-than-average layoffs continue until the ‘Great Resignation’ fades,” Robert Frick, a corporate economist at Navy Federal Credit Union, told CNBC.
Although it is highly contagious, the Omicron variant of Covid-19 does not appear to have sparked major layoffs to date. Omicron was first detected in late November, but experts believe it may have been circulating for longer. Still, it’s early. Diane Swonk, chief economist at Grant Thornton, told CNBC that delta and omicron colliding with the flu season could drag job growth down, causing January payroll numbers to become flat or start trending downward.