WASHINGTON (Businesshala) – California increased the number of Americans filing new claims for unemployment benefits last week amid another increase, but the labor market remains muted, with unemployment rolls down steadily in mid-September .
Still, a third straight weekly increase in jobless claims reported by the Labor Department on Thursday could raise concerns that slow economic growth could continue beyond the third quarter. Economic activity has cooled due to a resurgence in COVID-19 cases, driven by the delta version of the coronavirus, and fading from pandemic relief funds from the government.
“It’s not just the delta version. It could be the start of a significant slowdown in economic growth that will make it harder for those who have lost their jobs in the pandemic or to find new opportunities,” said chief of FWDBONDS in New York. Economist Christopher Rupkey said.
Initial claims for state unemployment benefits rose to 11,000, up a seasonally adjusted 362,000 for the week ended September 25. Economists polled by Businesshala had forecast 335,000 applications for the latest week. The claims are mounting, with economists blaming several factors, including wildfires in California and the lingering effects of Hurricane Ida, which struck the Gulf Coast in late August and caused record flooding in New York and New Jersey in early September. made.
The latest wave of coronavirus infections could also cause some companies to lay off employees in high-contact service areas. The upheaval caused by the pandemic has also made it difficult to adjust the data for seasonal fluctuations.
Unadjusted claims, which economists say offer a better reading of the labor market, fell 8,326 last week to 298,255. Claims in California rose to 17,978 last week, an increase of 17,218 in the previous week. California did not provide a reason for the increase wire.
There was also a surge in applications in Michigan last week, possibly related to idling of assembly plants by some automakers as they try to manage semiconductor supplies amid global shortages. Claims also increased significantly in Texas. However, there were major declines in filings in Virginia, Maryland, Arizona, Ohio and Louisiana.
Claims, which have fallen from a record 6.149 million at the beginning of April 2020, are well above their pre-pandemic levels.
Claims are likely to decline in the coming weeks, with economic activity picking up after being moderated by the latest coronavirus wave. There are signs that infections are decreasing, although deaths remain high.
“Fortunately the wave has picked up, but like previous waves, it takes at least a few weeks for consumers to return to some businesses, and those businesses stop laying off workers,” said Robert Frick, in Vienna. Corporate Economist at Navy Federal Credit Union, Virginia. “The declining trend may resume in October.”
US shares opened with gains. The dollar was stable against a basket of currencies. US Treasury prices fell.
The unemployment roll is shrinking
The claims report also showed that the number of people receiving benefits after aid dropped to 2.802 million in the week ending September 18 from 18,000 in the initial week, a sign that more people were finding work.
The so-called continuing claims covered the week during which the government surveyed households for the September unemployment rate. Sustained claims decreased slightly between the August and September survey periods.
The claims data is being watched for signs of how quickly the labor shortage, which has hindered hiring, will begin to ease after federal government-funded benefits expire earlier this month.
Those expanded benefits were blamed by businesses and Republicans for keeping the unemployed at home. There were a record 10.9 million open jobs at the end of July.
More than 8 million people are projected to lose all their pandemic benefits on 6 September. As a result, the total number of people receiving unemployment checks under all programs declined to 5.028 million during the week ending September 11, from 11.250 million previously. Week.
Veronica Clarke, an economist at Citigroup, said: “So far, evidence from states that ended benefits at the beginning of summer suggests that with the end of unemployment benefits nationally, there has been a sudden and large increase in the labor force. There is no chance of a comeback.” in New York.
The economy created 235,000 jobs in August, the lowest in seven months. Childcare shortages, fears of contracting the coronavirus and career changes related to the pandemic have been attributed to worker shortages.
A separate report from the Commerce Department on Thursday confirmed that economic growth accelerated in the second quarter due to fiscal stimulus that boosted consumer spending. GDP grew at 6.7% annual rate, the department said in its third estimate of GDP growth for the April-June quarter. This was revised to a 6.6% pace of expansion reported in August.
The economy grew at 6.3% in the first quarter. However, growth appears to be slowing in the third quarter as the Delta variant as well as raw material shortages hurt automotive sales and disrupted home manufacturing and purchases.
Growth estimates for the third quarter are below 5%.