In the United States, fewer people applied for unemployment benefits last week than at any point since 1969.
According to the Labor Department, just 187,000 individuals applied for jobless benefits. This was a decrease of about 28,000 from the previous week.
Since the onset of the coronavirus epidemic, the job market in the United States has taken a sharp turn.
On social media, the news generated multiple historical similarities, with some users uploading photographs from the Woodstock music festival.
“The last time unemployment claims were this low was the same year we sent people on the moon,” said California Democrat Ted Lieu.
“The Beatles were still together the last time weekly unemployment claims were this low,” Virginia Democrat Rep Don Beyer noted.
Many people are looking back to the past because of the current state of the US economy, but it hasn’t been simple for economists and analysts to come up with the correct historical comparisons.
When the lockdowns began two years ago, the weekly unemployment statistics reached new highs, with claims finally topping six million.
However, the economy has subsequently rebounded back with a vigor that has astonished most economists, thanks to a major government stimulus package.
Last year, the economy grew by 5.7 percent, and payrolls have been growing at a robust pace, increasing by more than 600,000 last month, helping to reduce the unemployment rate to 3.8 percent.
According to economists, Thursday’s data underscored the tight labor market.
President Joe Biden has tried to take credit for the advances, citing Democratic spending plans and breakthroughs against the coronavirus when he was in office.
He hailed Thursday’s news as just another proof of the country’s “historic economic revival.”
However, studies suggest that the population is still concerned about the economy, owing to rising prices at a rate not seen in 40 years.
Many in business are tormented by similarities to the 1970s, when the United States had so-called stagflation, in which growth stagnated even as price hikes spiraled, fueled in part by oil shocks.
Economic indicators, such as low jobless claims, show that America’s economy is headed for a recession, according to David Rosenberg, CEO of Toronto-based economic research firm Rosenberg Research.
But, he cautioned, that doesn’t guarantee the US economy will face issues similar to those experienced in the 1970s.
Inflationary pressures caused by supply shocks from the epidemic and Russia’s invasion of Ukraine, he believes, will ultimately subside.
He also expects efficiency increases to fuel development, citing increased expenditures in sectors such as robotics since the epidemic.
“That’s where the analogy to the 1970s really falls flat,” he explained. He believes that a better analogy is the post-World War One transitory inflation.
According to Brad DeLong, an economics professor at the University of California, the United States should endeavor to avoid following that path.
To keep inflation under control, the US central bank doubled interest rates from 3.75 percent to 7% at the time, a decision that renowned economists have since deemed to be too late and too far, he added.
He prefers similarities to the late 1940s and early 1950s, when the economy was shifting in reaction to WWII, the Korean War, and the Cold War.
“I might be completely incorrect. Uncertainty abounds. Everyone is looking back in time for their favorite historical inflationary occurrence to use as a parallel right now “he stated
“Perhaps we’ll see something altogether different.”