Unemployment benefit claims fall in Washington and nationally.

The good economic news reported yesterday continues. Jobless claims fell again in our state and nationally. The Seattle Times reports

New jobless claims in Washington state fell last week, the third consecutive weekly decline, as the state job market appeared to rebound from winter layoffs and a surge in COVID-19 cases fueled by the omicron variant of the coronavirus.

Washingtonians filed 4,731 new, or “initial,” claims for jobless benefits in the week ending Saturday, according to data posted Thursday by the state Employment Security Department. That’s down 12% from the prior week, and around 40% below the pre-pandemic level from the same week in 2020. 

The U.S. Department of Labor also reports another decline in weekly claims filings, although continuing claims and the four-week average remain elevated.

In the week ending January 22, the advance figure for seasonally adjusted initial claims was 260,000, a decrease of 30,000 from the previous week’s revised level. The previous week’s level was revised up by 4,000 from 286,000 to 290,000. The 4-week moving average was 247,000, an increase of 15,000 from the previous week’s revised average. The previous week’s average was revised up by 1,000 from 231,000 to 232,000.

The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending January 15, unchanged from the previous week’s unrevised rate.

Still, the Associated Press reports the labor market is not back to pre-pandemic normal yet.

A recent surge in COVID-19 cases has set back what had been a strong comeback from last year’s short but devastating coronavirus recession. Jobless claims, a proxy for layoffs, had fallen mostly steadily for about a year and late last year dipped below the pre-pandemic average of around 220,000 a week. Economists expect claims to return to those lower levels as the virus fades, which is already taking place in regions that were hit first with omicron infections.

The market remains uncertain, with clear challenges ahead.

Data for December will be released next week, but in November, employers posted 10.6 million job openings, the fifth-highest monthly total in records going back to 2000. A record 4.5 million workers, confident in their prospects for better opportunities, quit their jobs in November.

A red-hot U.S. economy has triggered inflation not seen in four decades, leading the Federal Reserve to ease its support for the economy. The Fed on Wednesday signaled that it would begin a series of interest-rate hikes in March, reversing pandemic-era policies that have fueled hiring and growth but also stubborn inflation. The downside of the Fed’s expected rate hike — or hikes — is that it will make it more expensive to borrow for a home, car or business.

Mostly good news with caution flags waving.