WASHINGTON (Businesshala) – The number of Americans filing new claims for jobless benefits fell last week, but layoffs rose from a 24-year low in September as hospitals fired unvaccinated workers and labor shortages hit facilities. forced to close.
The Labor Department said Thursday that initial claims for state unemployment benefits decreased by 38,000, a seasonally adjusted 326,000 for the week ended October 2. Economists polled by Businesshala had forecast 348,000 applications for the latest week.
Claims rose for three consecutive weeks as California
After the end of federal government-funded aid on September 6, people were moved to another program to maximize their access to unemployment benefits. The transfer, which allowed recipients to collect an additional week’s worth of benefits, boosted applications, even if it meant moving an existing claimant from one program to another.
Away from California, claims by automakers related to idling of assembly plants in some states increased as they try to manage supplies of semiconductors amid global shortages. A resurgence in COVID-19 infections driven by Delta Edition also disrupted activity in the high-contact service area.
It suggested some moderation in labor market conditions. A separate report on Thursday by global outplacement firm Challenger, Gray & Christmas showed job cuts announced by US-based employers rose 14% to 17,895 in September. Nevertheless, layoffs were 85% less as compared to September 2020.
In the third quarter, employers announced 52,560 job cuts, the lowest since the second quarter of 1997 and 23% less than in the July-September period.
Last month the layoffs were led by companies in the healthcare/products sector, which announced a cut of 2,673. Since the Pfizer vaccine received full-FDA approval, many health care facilities have implemented the vaccine mandate.
“Healthcare is facing a huge talent shortage,” said
Andrew Challenger, Senior Vice President, Challenger, Gray & Christmas. “Other systems are facing walk-outs or firing of unvaccinated workers, adding to the labor shortage. In some cases, entire units shut down due to staff shortages, leading to involuntary job losses. “
The ongoing tension in the supply chain is hurting the labor market. Industrial goods manufacturers announced 2,328 layoffs in September, while warehousing businesses planned to cut 1,936 jobs. In the services sector, 1,679 job cuts were announced.
But the increase in layoffs was dwarfed by an explosion in planned hiring, as retailers geared up for the holiday season. The Challenger report showed companies announced plans to hire 939,790 employees, compared to only 94,004 in August.
This bodes well for the September employment report due out on Friday. Non-farm wages increased by 500,000 jobs last month, according to a Businesshala survey of economists. Estimates range from 700,000 jobs to as low as 250,000. The economy created 235,000 jobs in August, the lowest in seven months.
The unemployment rate is projected to fall from 5.2% in August to 5.1%. But labor market indicators remained mixed in September. A survey by the Conference Board last week showed that consumer sentiment about the current labor market situation has softened.
The Institute for Supply Management’s measure of manufacturing employment rebounded last month after contracting in August. But ISM’s gauge of service industry employment slipped, with businesses reporting that “labor shortages (at all levels) were experienced.”
The pandemic forced some people to leave work to become caregivers. Others are reluctant to return for fear of contracting the coronavirus, while some have either retired or are seeking a career change. There were a record 10.9 million job opportunities at the end of July.
Economists are cautiously optimistic that labor shortages will begin to ease during the fall and winter following the end of extended unemployment benefits last month.
They will also keep an eye on the vaccine mandate amid reports that thousands of workers could be fired for refusing to vaccinate. President Joe Biden last month announced new rules requiring vaccinations at many private workplaces.
“The mandate is working,” said Chris Low, chief economist at FHN Financial in New York. “Vaccination rates have accelerated in recent weeks. If a higher vaccination rate keeps future COVID infection rates low and results in increased participation, rapid job growth may be possible next year.”