The start of the new year has brought welcome news about the state of the American economy. Following the holidays, a series of reports showed that the unemployment rate is lower than it has been in 50 years.
Jobless claims – a metric for estimating how many American workers lose their jobs every week – fell slightly in December. A spike in claims after Thanksgiving worried economists but was shown to be a false alarm. The numbers now stand at near post-recession lows.
Challenger, Gray & Christmas said that the number of December layoffs announced by American companies were lower than those reported for the previous 18 months.
In a reversal of last year’s trends, the fourth quarter’s announced layoffs were the smallest since last fall. Out of all of the reported job losses, only a few have been associated with the ongoing trade war between China and the United States.
The numbers show that at 3.5%, American workers are now enjoying the lowest unemployment rate in 50 years. Companies are increasingly reluctant to dismiss staff, as they are concerned about their ability to fill open jobs in an increasingly competitive job market.
Some more good news: the U.S. manufacturing sector continues to recover from its dip in the summer. According to several surveys, the drop in manufacturing demand has leveled out, resulting in the sector’s best quarter since the winter of 2019.
U.S. manufacturers were hugely disrupted by the trade war with China and the resulting tariffs, which have disrupted manufacturing around the world. Since the beginning of the dispute, companies have been forced to hire fewer new employees in order to compensate for receiving fewer orders.
Although manufacturers still have an uphill battle ahead, the road looks easier following the recent development of the U.S.-China trade agreement, which will be signed on January 15.
The improvement in relations between the two countries also helped to lift U.S. equities on the first days of the new year. On January 1, the Dow Jones Industrial Average and S&P 500 both saw record highs.