Initial jobless claims improved more than expected in the latest weekly data to reach a two-month low, as the U.S. labor market recovery pressed ahead while Omicron-related disruptions retreated.
The Labor Department released its latest weekly jobless claims report Thursday at 8:30 a.m. ET. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:
Initial jobless claims, week ended Feb. 26: 215,000 vs. 225,000 expected and an upwardly revised 233,000 during prior week
Continuing claims, week ended Feb. 19: 1.476 million vs. 1.420 million expected and a downwardly revised 1.474 million during prior week
At 215,000, the number of new jobless claims marked a back-to-back week of declines. It was also the lowest level since the week ended Dec. 31, when jobless claims totaled 207,000.
Jobless claims rose to nearly 300,000 in mid-January, reflecting some momentary backsliding in the labor market's improvements as Omicron virus cases surged to a record and seasonal adjustments in data became choppy due to the pandemic over the past two years. Still, claims have fallen precipitously compared to this time last year, with new claims coming in around 750,000 in late February 2021.
The overwhelming majority of labor market data and anecdotal remarks from companies have underscored a job market that remains incredibly tight. Demand for workers has far outpaced supply, and job openings have held near record levels. This has created a situation in which employees maintain a significant amount of leverage — and have seen considerable wage increases — while the labor supply-side constraints have contributed to economy-wide inflationary pressures.
"The labor market is extremely tight," Federal Reserve Chair Jerome Powell said in testimony before the House Financial Services Committee on Wednesday.
"Labor demand is very strong, and while labor force participation has ticked up, labor supply remains subdued," Powell said. "As a result, employers are having difficulties filling job openings, an unprecedented number of workers are quitting to take new jobs, and wages are rising at their fastest pace in many years."
And given the backdrop of rising prices and a tight labor market, Powell also signaled the Federal Reserve remained on track to begin raising interest rates from current near-zero levels following the central bank's March meeting.
Encouragingly, other labor market data have shown an increase in job growth across some of the industries hardest hit by the pandemic. ADP's private payrolls report released Wednesday showed a much better-than-expected 475,000 jobs returned in February, following a gain of more than half a million in January. And 170,000 jobs returned in leisure and hospitality industries, comprises more than one-third of the overall payroll gain.
The official February jobs report from the Labor Department on Friday is expected to also reaffirm these trends. Consensus economists are looking for another 403,000 non-farm payrolls to have returned last month, building on January's 467,000. The unemployment rate is anticipated to fall to 3.9% — matching December's for the lowest since February 2020 before the pandemic.
The Labor Department's monthly jobs report is slated for release Friday at 8:30 a.m. ET.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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