The number of Americans filing new claims for unemployment benefits decreased unexpectedly as the demand for labor remained high, which helps keep the economy afloat, in spite of rising interest rates and tighter financial conditions. According to the US Department of Labor, the number of persons filing claims for initial unemployment benefits fell to 200,000 for the week ended May 28, 2022, a decrease of 11,000 over the revised level of the previous week. The claims for unemployment benefits remained low after falling to more than a 53-year low of 166,000 in March 2022. During the week ended May 21, 2022, the number of people getting unemployment benefits after initial assistance declined 34,000 to 1,309,000.
Active Jobs in the US
According to GlobalData’s Job Analytics, the US had 2,901,397 active jobs in May 2022, whereas March 2022 reported the maximum number of active jobs in the past year with 3,090,736 postings for job vacancies. For the period May 2021–May 2022, the US registered a 30% increase in the number of active jobs. However, the rate of month-over-month growth in vacancies slowed down in April 2022.
Strong Labor Markets
Despite the global economic uncertainty due to the COVID-19 pandemic and the Russia-Ukraine conflict, the US labor market continued to expand at a rapid pace. According to the Department of Labor, the US economy added more than 400,000 jobs in April 2022, indicating the willingness of individuals to return to the workforce. The unemployment rate stood at 3.6% in May 2022, marginally higher than the pre-pandemic level of 3.5%.
The strong labor market led to an increase in wages at an unprecedented rate, leading to a high rate of inflation. While job opportunities in the US labor market increased, economic stagnation and rising inflation could exert downward pressure on wages for the lower-income segment.
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