Number of Workers Receiving Unemployment Benefits Falls To Lowest Level Since 1973

Number of US Workers Receiving Unemployment Benefits Falls to Lowest Level Since 1973

The total number of US workers receiving unemployment benefits has fallen to the lowest level in 44 years, according to new data from the Department of Labor.  Furthermore, they show no signs of increasing any time soon. The Washington Examiner reports:

Altogether, 1.87 million people received unemployment insurance benefits in the last week of [2017], the lowest such seasonally-adjusted mark since December of 1973. Benefits are available for up to 26 weeks in most states.

The low number of people utilizing unemployment insurance is a good sign for the economy. Fewer people seeking unemployment benefits suggests that fewer people are getting laid off. Total claims have scraped the lowest levels in decades several times in recent months.

As for new claims for unemployment benefits, they rose 11,000 to 261,000 in the first week of 2018, according to the same report.

Forecasters had expected jobless claims to drop only slightly from the previous week’s level of 250,000, the highest such mark since November. Instead, they rose to the highest level since September, when the numbers were inflated by hurricane damage to southern states. The Department of Labor said that hurricane-related damage is still affecting the collection of insurance claims in Puerto Rico and the Virgin Islands.

Nevertheless, new claims are still below the threshold that would suggest that unemployment could start rising, which economists peg at around 300,000.

This is good news for America wuarterly US GDP growthand President Trump, who promised voters that he would fix America’s broken economy.

However, it’s important that we don’t forget about the broader context.

Yes, recent economic growth, and a surge in employment is part of the reason unemployment claims have decreased.  For example, America’s GDP growth topped 3.3 percent last quarter.

Likewise, many companies are either hiring new workers, or anticipate new hiring in response to the passage of President Trump’s tax reform bill—all good news for workers.

But on the other hand, we must remember that there are still 23 million Americans who suffer from chronic unemployment—they can’t collect benefits because it’s been too long. Their benefits simply lapsed.  This figure is (partly) reflected in the declining labor force participation rate (see below):

labor force participation chartNevertheless, there is cause to celebrate.  American workers have been left to the wolves of mass immigration and offshoring for decades, and Trump may yet reverse this trend.

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