(Adds Chamber of Commerce survey, updates markets)
* Weekly jobless claims increase 28,000 to 222,000
* Continuing claims drop 107,000 to 1.956 million
* Layoffs plunge 34.8% to 14,875 in November
WASHINGTON, Dec 2 (Reuters) - The number of Americans filing
new claims for unemployment benefits increased less than
expected last week, pointing to tightening labor market
conditions, while layoffs tumbled to the lowest level in 28-1/2
years in November.
The weekly unemployment claims report from the Labor
Department on Thursday, the most timely data on the economy's
health, also showed jobless benefits rolls falling below 2
million for the first time since the COVID-19 pandemic started
in the United States nearly two years ago.
The upbeat news on the labor market added to strong consumer
spending and manufacturing data in suggesting that the economy
was accelerating after hitting a speed bump in the third
quarter. The Omicron variant of the coronavirus, however, poses
a risk to the brightening picture.
Federal Reserve Chair Jerome Powell in a nod to the
strengthening economy told lawmakers this week that the U.S.
central bank should consider accelerating the pace of winding
down its bond purchases at its Dec. 14-15 policy meeting.
"Companies are not laying off workers like they did during
the recession," said Christopher Rupkey, chief economist at
FWDBONDS in New York. "Powell was right to hint the Fed might
speed up the tapering process because a tight labor market means
increasing wage demands will stoke the fires of inflation."
Initial claims for state unemployment benefits rose 28,000
to a seasonally adjusted 222,000 for the week ended Nov. 27.
Claims dropped to 194,000 in the prior week, which was the
lowest number since 1969.
They tend to be volatile around this time of the year.
Economists polled by Reuters had forecast 240,000 applications
for the latest week. Claims have declined from a record high of
6.149 million in early April 2020.
Unadjusted claims fell 41,622 to 211,896 last week amid
sharp declines in filings in California, Texas and Virginia,
which offset notable rises in North Carolina and Wisconsin.
"Before seasonal adjustment, claims generally move higher in
the colder months, but the related layoffs may not be occurring
like normal this year because of the tight labor market," said
Daniel Silver, an economist at JPMorgan in New York. "This could
continue to occur in the coming weeks."
Stocks on Wall Street were trading higher. The dollar dipped
against a basket of currencies. U.S. Treasury prices fell.
EYES ON PAYROLLS
The claims data has no bearing on the department's closely
watched employment report for November, scheduled to be
published on Friday, as it falls outside the period during which
the government surveyed businesses and households for the
nonfarm payrolls count and the unemployment rate.
Claims declined between mid-October and mid-November.
According to a Reuters survey of economists, nonfarm
payrolls probably increased by 550,000 jobs last month after
rising 531,000 in October. The unemployment rate is forecast
dipping to 4.5% from 4.6% in October.
Also arguing for continued improvement in the labor market,
the ADP National Employment report on Wednesday showed private
payrolls increased by 534,000 jobs last month. A measure of
manufacturing employment rose to a seven-month high, a survey
from the Institute for Supply Management showed.
The Conference Board's labor market differential - derived
from data on consumers' views on whether jobs are plentiful or
hard to get - jumped to a record high in November.
The run of good news on the labor market continued, with
another report on Thursday from global outplacement firm
Challenger, Gray & Christmas showing job cuts announced by
U.S.-based employers dropped 34.8% in November to 14,875, the
fewest since May 1993.
But worker shortages are hindering faster job growth.
The Fed's Beige Book on Wednesday described employment
growth ranging from "modest to strong" across the U.S. central
bank's districts during October and early November, with
contacts noting "persistent difficulty in hiring and retaining
There were 10.4 million job openings as of the end of
September. The workforce is down 3 million people from its
pre-pandemic level, despite generous federal government-funded
benefits expiring, schools reopening for in-person learning and
companies raising wages.
Thursday's claims report showed the number of people
receiving benefits after an initial week of aid plunged 107,000
to 1.956 million in the week ended Nov. 20.
The lowest level in the so-called continuing claims since
mid-March 2020 likely reflected a combination of people
exhausting their benefits as well as finding work. A total 2.31
million people were receiving unemployment checks under all
programs in mid-November.
Still, labor supply could remain tight. A survey from the
Chamber of Commerce on Thursday showed no urgency to return to
work among many Americans who lost their jobs during the
pandemic and remain unemployed.
"It is increasingly clear that the workforce challenges
facing our country extend beyond those induced by the pandemic
and we cannot simply assume that people will return to the
workforce," said Chamber of Commerce President Suzanne Clark.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and