New filings for jobless benefits fell below the pre-pandemic level for the first time since December as the economy continued to recover from the omicron surge, according to government data released Thursday.
New filings—a proxy for layoffs—dropped to 215,000 for the week ending Feb. 26 from an upwardly revised 233,000 in the prior week. The drop marked back-to-back weeks of decreases after an unexpected rise in early February, which proved to be temporary.
Our preferred measure for jobless claims—the 13-week moving average—showed that new filings remained around the pre-pandemic level, the 2019 average, for the first two months of the year.
The claims data continues to signal a tight labor market where labor shortages keep companies from laying off their employees.
We expect the number of claims to stay close to the 2019 average for the time being as the economy approaches full employment and the labor force participation rate shows no sign of a quick rebound.
Demand for labor will be strong even if the Federal Reserve, as expected, increases its policy rate by 25 basis points this month. Interest rates remain extremely accommodative by historical standards.
Beneath the headline, continuing claims for the week ending Feb. 19 inched up to 1.476 million from 1.474 million, a result of the temporary increase three weeks ago. The number of existing claims has been significantly lower than the pre-pandemic level for the past two months.