WASHINGTON (Businesshala) – The number of Americans filing new claims for unemployment benefits fell to near pre-pandemic levels last week as the labor market continues to improve, although labor shortages continue to hinder rapid job growth .
On Thursday the Labor Department’s weekly unemployment claims report, the most timely data on the health of the economy, also showed jobless benefits rolls falling to a 20-month low in early November. The economy is picking up momentum again after a lull in the summer as a wave of COVID-19 infections swept through the country, driven by the Delta version.
“The demand for labor is very strong and the supply of workers is short, so there are very few layoffs right now,” said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania.
The state’s initial claims for unemployment benefits fell by 1,000 to 268,000 seasonally adjusted claims for the week ended November 13, the Labor Department said Thursday. It was the lowest level since the start of the coronavirus pandemic in the United States more than 20 months ago.
Economists polled by Businesshala had estimated 260,000 applications in the latest week. The small drop was because the model the government uses to remove seasonal fluctuations from the data was less generous last week.
Unadjusted claims fell by 18,183 to 238,850 last week. The shortage was led by Kentucky, possibly due to temporary layoffs of automobile workers returning to factories as automotive manufacturers deal with global semiconductor shortages. Big declines were also seen in Michigan, Tennessee and Ohio, which have strong auto makers presence.
Filing in California compensates for the shortfall.
A seventh consecutive weekly drop in claims has left them above the 256,000 level in mid-March 2020 and in a range linked to a healthy labor market. Claims declined from a record high of 6.149 million in early April 2020.
The continued improvement is in line with other data that suggested a pick-up in economic activity at the start of the fourth quarter after the July-September period grew at its slowest pace in more than a year.
Retail sales rose in October and production at factories also jumped sharply.
US shares opened with gains. The dollar fell against a basket of currencies. US Treasury prices were lower.
The claims report showed gains continued to accrue after dropping from 129,000 to 2.080 million in the initial week of aid in the week ended November 6. This was also the lowest level in 2020 since mid-March.
A total of 31.85 million people were collecting unemployment checks under all programs for the week ending 30 October. The shrinking unemployment list raises hopes that more people will soon be back in the labor force. Millions of unemployed Americans remain at home even after the end of generous federal government-funded benefits and the reopening of schools for individualized learning.
The claims data covers the period during which the government surveyed business establishments for the non-farm payroll component of the November employment report.
Claims have declined since mid-October, which would suggest strong employment growth this month. But with 10.4 million job openings by the end of September, there is a severe shortage of workers.
“The key to monthly job growth is the labor supply and the delta variance, so there’s some uncertainty,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “The good news is that the impact of the delta variant on the labor market in November will be less than that of the teeth of the recent wave.”
The economy created 531,000 jobs in October. Employment growth this year has averaged 582,000 jobs per month and the labor force is 3 million below its pre-pandemic level.