That’s the percentage of the workforce that was collecting unemployment benefits for the week that ended April 9, the lowest in data going back to 1971 and a sign of how robust the job market is these days.
The insured unemployment rate of 1%, seasonally adjusted, was down from 1.1% the week before, the Labor Department said Thursday, and it meant that 1.42 million people were receiving checks under the government’s unemployment insurance program. The rate was a stark contrast from where it was at the height of the pandemic in 2020, when it climbed as high as 15.9%.
“The labor market remains in excellent shape as the spring quarter begins,” PNC Senior Economic Advisor Stuart Hoffman wrote in a commentary. “Firms are competing for workers and bidding up wages.”
The job market is so good, in fact, that it might look a little too good to people at the Federal Reserve, economists said. Fed officials have worried about a “wage price spiral” taking hold, in which employers raise pay to attract scarce workers, then raise prices of goods and services to pay for the wage increases, driving inflation higher. The Fed is in the midst of a campaign to clamp down on inflation, already at 8.5%, by raising its benchmark interest rate, a move that could tame price increases by raising the cost of borrowing money, but potentially at the cost of causing a recession and increasing unemployment.
The insured unemployment statistic is not to be confused with the overall unemployment rate, which counts unemployed people whether they’re collecting insurance checks or not. The unemployment rate includes people who don’t qualify for unemployment benefits and those who have exhausted their benefits, and it’s calculated using a government survey of a representative sample of households. The general unemployment rate is also extremely low now at 3.6%.
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