October 21, 2021 – The Labor Department reported that 290,000 Americans have filed new claims for state unemployment benefits, a decrease of 6,000. 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 293,000 to 296,000. The four-week moving average was 319,750, a decrease of 15,250 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 334,250 to 335,000.
“Beyond weekly fluctuations, filings are likely to trend down over coming weeks, gradually moving closer to the pre-pandemic level,” Rubeela Farooqi, chief U.S. economist with High Frequency Economics, said in a report. “Businesses are reporting severe labor shortages and are likely unwilling to reduce their workforce.”
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In its most recent survey of national economic conditions, the Federal Reserve found employment growth “dampened by a low supply of workers.” The Fed’s “Beige Book” report further said retail, hospitality and manufacturing firms had to cut hours or production because of a lack of workers.
Companies also reported “higher turnover, as workers left for other jobs or retired,” while Covid-related factors such as child care and health fears also contributed to problems. The report also noted that business owners are increasing wages, benefits and bonuses as they struggle to attract and retain workers.
Christopher Waller, a member of the Federal Reserve’s board of governors, on Tuesday said that 2 million of the 22 million jobs lost to the pandemic may not return because retirements have accelerated so quickly since the coronavirus slammed the U.S. economy.
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.”
Job Openings Remarkably High
“All this signals that most employers don’t need or want to shed workers,” said Mark Hamrick, senior economic analyst at Bankrate. “It is quite the contrary with job openings remarkably high.”
“With the nation’s unemployment rate at 4.8 percent, and the job market regarded as tight in many markets and sectors, the headwinds of supply chain congestion and high inflation threaten to make further significant job market improvement hard to come by,” Mr. Hamrick said.
During the week, 43 states reported 517,949 continued weekly claims for Pandemic Unemployment Assistance benefits and 45 states reported 331,567 continued claims for Pandemic Emergency Unemployment Compensation benefits. The highest insured unemployment rates were in Puerto Rico (4.3), Illinois (3.5), California (3.3), District of Columbia (3.0), Hawaii (3.0), New Jersey (2.7), Nevada (2.6), Alaska (2.4), Pennsylvania (2.3), and New York (2.2). The largest increases in initial claims were in Michigan (+3,673), Missouri (+2,566), Maryland (+2,337), New Mexico (+2,012), and Kentucky (+1,454), while the largest decreases were in Tennessee (-989), California (-851), Florida (-839), New Jersey (-464), and Alabama (-301).
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media