Jobless Claims Edge Down as Recovery Continues

October 7, 2021 – The Labor Department reported that 326,000 Americans have filed new claims for state unemployment benefits, an increase of 38,000. The previous week’s level was revised up by 2,000 from 362,000 to 364,000. The four-week moving average was 344,000, an increase of 3,500 from the previous week’s revised average. The previous week’s average was revised up by 500 from 340,000 to 340,500.

This morning’s report ended a three-week streak of increases in new weekly jobless claims. First-time filings had reached 312,000, or the lowest level since March 2020, in early September before rising. Some economists attributed this to an uptick in coronavirus cases and disruptions due to Hurricane Ida, which may have caused some individuals to delay filing to mid-month.

“While there are some encouraging signs that the worst may have passed with the Delta variant of COVID-19, which took wind out of the proverbial sails of the economic recovery, supply chain challenges and rising prices persist with no immediate sign of substantial resolution or improvement,” Mark Hamrick, senior economic analyst for Bankrate, told Yahoo Finance. “Cargo ships unable to head to West Coast ports, a trucker shortage and lack of sufficient rail capacity are among the complicating factors all conspiring to boost product and component bottlenecks when retailers are very much focused on the holiday shopping season.”

The unemployment rate is forecast dipping to 5.1% from 5.2% in August. But labor market indicators were mixed in September. A survey from the Conference Board last week showed consumers’ views of current labor market conditions softened.

During the week, 42 states reported 647,690 continued weekly claims for Pandemic Unemployment Assistance benefits and 45 states reported 630,814 continued claims for Pandemic Emergency Unemployment Compensation benefits. The highest insured unemployment rates were in Puerto Rico (4.5), Illinois (4.2), California (3.1), Hawaii (3.0), New Jersey (2.9), Nevada (2.8), Alaska (2.7), Oregon (2.7), Louisiana (2.5), and New York (2.5). The largest increases in initial claims for the week were in California (+9,907), Michigan (+6,115), Texas (+4,625), District of Columbia (+2,223), and Minnesota (+2,002), while the largest decreases were in Virginia (-7,245), Maryland (-5,617), Arizona (-4,241), Louisiana (-3,160), and Ohio (-2,853).

Layoffs

Layoffs last month were led by companies in the healthcare/products sector, with 2,673 announced cuts. Since the Pfizer vaccine received full-FDA approval, many healthcare facilities have implemented vaccine mandates.

“Healthcare is facing an enormous talent shortage,” said Andrew Challenger, senior vice president at Challenger, Gray & Christmas. “Other systems are facing walk-outs or firings of unvaccinated staff, further broadening the worker shortage. In some cases, a lack of staff leads to the closing of entire units causing involuntary job loss.”

“The mandate is working,” said Chris Low, chief economist at FHN Financial in New York. “The vaccination rate has accelerated in recent weeks. If a higher vaccination rate holds COVID infection rates lower in future and participation rises as a result, faster job growth may be possible next year.”

Looking Forward

Employers in 32 percent of U.S. businesses surveyed expect an increase in payrolls during the next three months, while three percent expect to trim payrolls and 63 percent anticipate no change, according to the latest “Employment Outlook Survey,” released by ManpowerGroup. “Employers are ready to bring their workers back as restrictions lift and America gets ready to work,” said Becky Frankiewicz ManpowerGroup president, North America. “Yet childcare challenges, health concerns and competition mean demand still outstrips supply which is dampening the ‘big return’ of the American workforce. It’s a worker’s market and employees are acting like consumers in how they are consuming work – seeking flexibility, competitive pay and fast decisions.” Now is the time for employers to get creative to attract talent, she said, “and to hold onto the workers they have with both hands.”

According to the study, payroll gains were expected in all 12 U.S. industry sectors: leisure and hospitality (+41 percent), wholesale and retail trade (+29 percent), education and health services (+27 percent), transportation & utilities (+26 percent), durable goods manufacturing (+25 percent), nondurable goods manufacturing (+25 percent), professional and business services (+21 percent), construction (+19 percent), information (+18 percent), other services (+16 percent), financial activities (+15 percent) and government (+15 percent).

Related: Major Paradigm Shifts Coming Out of the Coronavirus Crisis

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media