The number of Americans filing first-time claims for unemployment benefits rose last week to 230,000, the Labor Department reported on Thursday.
The number is 23,000 higher than the prior week’s 207,000. The four-week moving average was 210,750, an increase of 6,250.
Although the figure was above the recent trend of readings near 200,000, the report confirms what is already a tight labor market as 2022 begins. Last week, the department reported that 199,000 jobs were created last month, while the unemployment rate fell to 3.9%.
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Staffing firm Randstad said it saw the average wage in December 2021 increase 15.6% from a year ago. The number of job postings rose 25% from the same time last year, while the number of applicants decreased by 28%.
“The new wave of the pandemic is casting a shadow of uncertainty on the labor market as we head into a new year,” Karen Fichuk, CEO of Randstad North America, said in an email. “With workers continuing to re-evaluate their priorities and leave their jobs in record numbers, it is more important than ever for employers to listen to workers. Business leaders can successfully navigate this uncertainty by prioritizing worker health and safety, offering opportunities for training and professional growth, improving salary and benefit offerings, and allowing for increased flexibility.”
Meanwhile, the Bureau of Labor Statistics reported Thursday that the producer price index, a measure of inflation at the wholesale level, rose 0.2% in December, half the expected 0.4% increase and down from increases of 1% and 0.6% in the two previous months. Overall, the rate rose at an annual rate of 9.7% in 2021. That was the largest increase since 2010, when the data was first tabulated.
The report follows Wednesday’s release of the consumer price index for December that showed prices rising at an annual rate of 7%.
“The question now is whether inflation will peak over the coming months, or if continued price pressures will prompt the Fed to remove monetary accommodation more aggressively,” BCA Research wrote in a note to clients Thursday.
“Our base case is that CPI inflation will moderate over the coming 6-12 months as the pandemic situation improves which will ease supply-side disruptions and support a rotation in demand from goods to services,” the note added.
“Businesses are worrying about rising input and wage costs, while households are distressed at the surging consumer prices, and they both have cause for concern,” economist Joel Naroff said in a statement Wednesday. “Inflation jumped again in December, though the pace was down from what we saw in October and November. Since December 2020, prices were up 7%, an increase not seen since the wage/price inflation spiral days in the early 1980s. Excluding food and energy, the rise over-the-year was the greatest in 30 years.”