WASHINGTON: The number of Americans filing new claims for unemployment benefits dropped to a 52-year low last week, suggesting economic activity was accelerating as a year ravaged by shortages, high inflation and an unrelenting pandemic draws to a close.
The plunge in claims reported by the Labor Department on Wednesday was, however, exaggerated by difficulties adjusting the data for seasonal fluctuations this time of the year.
Still, the labor market is tightening, with jobless rolls shrinking in mid-November to the smallest since March 2020 when the economy was in the grips of the first wave of COVID-19 infections.
The economy’s strengthening tone was confirmed by other data showing strong consumer spending in October as well as business orders for equipment, excluding transportation.
The goods trade deficit narrowed sharply last month as exports surged.
But prices remained stubbornly high, with annual inflation jumping by the most in nearly 31 years.
The raft of solid reports ahead of Thursday’s Thanksgiving holiday prompted economists to boost their fourth-quarter growth estimates to as high as an 8.6% annualized rate. Reuters