Economic Report: U.S. jobless claims drop to pandemic low of 269,000 as firms avoid layoffs during labor shortage
The numbers: The number of Americans who applied for unemployment benefits in late October fell to yet another pandemic low, reflecting an urgent need by companies to hold onto to current employees and find new ones.
New jobless benefit claims dropped by 14,000 to 269,000 in the seven days ended Oct. 30, the government said Thursday.
Economists polled by The Wall Street Journal had estimated new claims would total a seasonally adjusted 275,000.
Last month new unemployment filings dropped below the key 300,000 level for the first time since the start of the viral outbreak in March 2020. New claims were in the low 200,000s before the pandemic.
Companies are trying to hire more people and avoid layoffs in light of the biggest labor shortage in decades. They’ve got more than 10 million open jobs, but a surprising lack of available workers has made it hard to fill them.
Big picture: The economy appears to be speeding up again as the “delta” variant of the coronavirus fades, but the ongoing shortage of labor might not go away so easily. Some five million people who had jobs before the pandemic still haven’t returned to work and it’s unclear if or when they will do so.
Without more workers, businesses can’t produce enough goods and services to keep up with torrid demand. The lack of labor could eventually slow the economic recovery unless it eases.
Key details: New jobless claims declined the most last week in Florida and Missouri. The only states to post sizable increases were Kentucky and California.
Jobless claims were little changed in most other states.
The number of people already collecting state jobless benefits, meanwhile, fell by 134,000 to 2.1 million. These so-called continuing claims are at a pandemic low.
Altogether, 2.67 million people were reportedly receiving jobless benefits through state or federal programs as of Oct 16.
Just under 2 million were collecting benefits before the pandemic.
What they are saying? “Filings are trending lower, moving closer to pre-pandemic
levels,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “Businesses are likely averse to laying off workers, given they continue to face labor shortages.”