Tight Labor Market Keeping Jobless Claims in Check

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Economists estimate unemployment applications to drop nearer to pandemic

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The Labor Department will release the latest numbers at 8:30 am on Thursday.

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Layoffs are falling from last year’s highs as companies lay off their workforce and try to fill positions amid strong demand. Job opportunities hit record highs this summer, albeit somewhat reduced in August, while the number of out-of-job seekers declined in September.

“Employers are trying to figure out how to attract job seekers, and it’s challenging,” said Ann Elizabeth Konkel, an economist at the job site Indeed.

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Americans are leaving their jobs at historically high rates, a sign of workers’ confidence in the job market. According to the Labor Department, about 4.3 million workers left their jobs in August, the most for a record up to 2000.

Workers who leave their jobs voluntarily are not eligible for unemployment benefits, and this may mean that companies are not required to lay off other employees when business slows.

Many economists expect labor shortages to persist for a long time, including accelerating retirements, preventing workers from looking for jobs. Some, however, think that labor shortages due to the pandemic, school reopenings and unemployment benefits ending will compound this decline.

The number of Americans receiving unemployment benefits overall is declining after programs designed to respond to the pandemic’s impact on the labor market ended in all states last month.

One of those programs provided payments to gig workers and others who typically weren’t eligible to tap unemployment insurance. Another expanded payment to people who have exhausted state benefits. In addition, the federal government funded an increase of $300 per week for all unemployment programs.

Continuing claims, a proxy for those receiving payments for all unemployment programs, fell to about 4.17 million in mid-September from about 12 million at the end of August, before pandemic aid ended nationwide. That data is not adjusted seasonally and is reported at a delay of several weeks.

Some states have continued to file pandemic claims in the weeks after the program ended, possibly reflecting the remaining backlog in payments.

write to [email protected] . But Sarah Chaney Cambon

.

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