The labor market closes out 2021 on the best note yet

The labor market closes out 2021 on the best note yet

The final economic data in 2021 was this morning’s report on initial and continued jobless claims. And the good news for workers continued.

New claims declined back under 200,000 to 198,000, the best pandemic showing except for November 20’s 194,000, and December 4’s 188,000. The 4 week average of new claims declined to 199,250:

This is the best showing for the 4 week average in over 50 years, since the end of 1969:

Continuing claims for jobless benefits also declined to a new pandemic low of 1,716,000:

Except for 2018-19, this is also the lowest showing since 1974:

This is essentially the tightest market for employees in nearly 50 years. It is no surprise that wages have been rising sharply. We can expect this situation to continue so long as the pandemic keeps many potential workers (on the order of 4,000,000 or so) on the sidelines.

In the next few days, I’ll post my retrospective report card on my 2021 forecasts from 6 and 12 months ago. Then next week I’ll be back at it again for 2022.