WASHINGTON, Oct 14 (Businesshala) – The number of Americans filing new claims for unemployment benefits fell to near a 19-month low last week, further evidence that labor shortages slow jobs rather than weak demand for labor. was behind the growth.
Initial claims for state unemployment benefits fell 36,000 to 293,000, a seasonally adjusted 293,000 for the week ended October. This was the lowest level since mid-March 2020. Economists polled by Businesshala had forecast 316,000 claims for the latest week.
With the second straight weekly drop, claims are now at the upper end of the 250,000-300,000 range, which is considered to be in line with a healthy labor market. Claims have fallen from a record high of 6.149 million in early April 2020.
The government reported last Friday that only 194,000 jobs in non-farm payrolls grew in September, the lowest in nine months. The cooldown in employment growth is mostly due to a shortage of workers as well as skill mismatches, with government data showing on Tuesday that there were 10.4 million job opportunities at the end of August.
Labor shortages, caused by the COVID-19 pandemic, are prevalent in other economies as well. With a decline in coronavirus infections and a full-fledged reopening of schools for in-person learning, driven by Delta Edition, it is expected that more Americans will rejoin the labor force.
The labor crisis could also ease in the coming months following the end of federal government-funded benefits in early September. But amid increased self-employment and massive savings, as well as early retirement, thanks to a strong stock market and record house price gains, the labor pool could remain shallow for a while.
Labor shortages are affecting the supply chain as there are fewer workers to produce raw materials and goods as well as to send them to markets, leading to inflation.
In another report on Thursday, the Labor Department said its producer price index for final demand rose 0.5% in September after rising 0.7% in August. In the 12 months through September, the PPI rose 8.6%, the biggest year-over-year advance since November 2010, when the series corrected after an 8.3% increase in August.
Economists polled by Businesshala had forecast the PPI to grow 0.6% on a monthly basis and 8.7% year-on-year.
The reports followed on the heels of news Wednesday due to a solid increase in consumer prices in September, driven by strong gains in food and rent as well as a range of other goods.
In the minutes of the Federal Reserve’s September 21-22 policy meeting published on Wednesday, some US central bank officials “expressed concerns that increased inflation rates could lead to
feed through the long-term inflation expectations of
homes and businesses.”