The number of Americans filing initial unemployment claims tumbled to 199,000 — the lowest level since November 1969 — the Labor Department reported Wednesday, part of a spate of positive economic news that signaled that many of the wrinkles of the nation’s recovery continue to be smoothing out.
t was just the latest bit of good news for the labor market, which remains about 4 million jobs below pre-pandemic levels but has staged a strong recovery, adding about 581,000 jobs a month on average this year.
Separately, the Commerce Department said that consumer spending increased by 1.3 percent in October, its fastest pace since March, in a sign that Americans are continuing to spend.
The rash of positive indicators had many banks and economists revising up their predictions for gross domestic product growth for the last three months of the year, after a
disappointing third quarter. JPMorgan Chase revised its estimate to an annualized 7 percent, up from 5 percent on Wednesday. Morgan Stanley
moved its forecast up to 8.7 percent from 3 percent.
“The economy is much stronger than what we had originally understood,” said Joe Brusuelas, chief economist at RSM, who moved his firm’s GDP forecast up 7.2 percent from 5.6 percent. “The U.S. economy is booming right now. Despite the increase in inflation.”
Of particular note were unemployment claims, a proxy for layoffs, which fell more than 71,000 the week ending Nov. 20, compared with the week before. It represented the eighth straight week of declines and a pivotal shift, as claims are now well below pre-pandemic levels. In 2019, average weekly jobless claims hovered around 220,000.
Some economists, however, cautioned that the numbers were likely a product of seasonal adjustments. Still, the drop marks a stark contrast with this time last year, when roughly 700,000 claims were filed. It’s also a reflection of the tight labor market, which has companies scrambling to retain and expand their workforces.
