Jobless Claims Fall to Lowest Level Since March 2020
October 14, 2021 – The Labor Department reported that 293,000 Americans have filed new claims for state unemployment benefits, a decrease of 36,000. This is the lowest level for initial claims since March 14, 2020 when it was 256,000. The previous week’s level was revised up by 3,000 from 326,000 to 329,000. The four-week moving average was 334,250, a decrease of 10,500 from the previous week’s revised average. This is the lowest level for this average since March 14, 2020 when it was 225,500. The previous week’s average was revised up by 750 from 344,000 to 344,750.
“I see this as evidence of a pick-up in employment growth. After all, monthly jobs growth is about the level of hiring less the level of separations,” Neil Dutta, head of economics at Renaissance Macro Research, told Yahoo Finance. “Assuming quits are flat this month as labor supply is released, the drop in claims implies a decline in separations and stronger payrolls.” Shortages are “a severe constraint for the labor market currently,” said Rubeela Farooqi, chief U.S. economist for High Frequency Economics. “Overall, the labor market remains on a gradual path towards pre-pandemic health. However, the slowdown in the pace of job gains and still-depressed participation rates are reminders that the process will likely take some time.”
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“We’re getting more concerned that much of the drop in labor force participation will prove permanent, which is in turn a reason to expect the recovery in real activity and employment to disappoint over the coming years, while wage and price growth remain elevated,” said Michael Pierce, senior U.S. economist for Capital Economics.
“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.”
During the week, 43 states reported 549,103 continued weekly claims for Pandemic Unemployment Assistance benefits and 45 states reported 440,435 continued claims for Pandemic Emergency Unemployment Compensation benefits. The highest insured unemployment rates were in Illinois (4.4), Puerto Rico (4.3), California (3.3), Hawaii (2.9), the Virgin Islands (2.8), New Jersey (2.7), District of Columbia (2.6), Nevada (2.6), Alaska (2.5), and Pennsylvania (2.5). The largest increases in initial claims was in Pennsylvania (+1,707), while the largest decreases were in California (-14,733), District of Columbia (-3,905), Michigan (-3,370), Missouri (-2,598), and Texas (-2,376).
Employment rose by 194,000 in September as the U.S. unemployment rate fell to 4.8 percent, according to the most recent U.S. Bureau of Labor Statistics report. So far this year, monthly job growth has averaged 586,000. Notable job gains occurred in leisure and hospitality, in professional and business services, in retail trade, and in transportation and warehousing. Employment in public education declined over the month.
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.”
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
