By Sonali Pathak
The latest weekly jobless claims have risen from a pandemic-era low point of last week. This shows that there have been continuing improvements in the recovery of the labor market. The weekly jobless claims report was released by the Labor Department this past Thursday. Here are some of the main figures from the report. The initial weekly jobless claims were 332,000. This was higher than the estimated figure of 322,000 and the revised figure of 312,000 last week. The continuing weekly jobless claims run a week behind the initial claims. It was 2.665 million. This was lower than the estimated figure of 2.740 million and 2.783 million from the previous week.
The sustained drop in new weekly jobless claims has also shown that labor difficulties and shortages in hiring have been a great drag on the labor market in recent times. It holds greater responsibility than the separations and the firings. The number of unemployed people and claiming unemployment benefits over a long period has also decreased drastically with the drop in the new filers. At the end of August, the number of people claiming unemployment benefits across federal and state programs was nearly 12.1 million. This was an increase of about 180,000 from last week. But, the overall trend in the total number of claimants has been on the decrease. During the same period last year, the total number of people claiming unemployment benefits was nearly 30.3 million.
These recent figures of the total number of people claiming unemployment benefits show the actual drop in total claimants. The data is usually reported on a delay of many weeks. The federal unemployment benefits authorized by Congress and launched due to the pandemic expired last week across all the states. It includes programs such as the Pandemic Unemployment Assistance. It gave benefits to contractors and gig workers who were not eligible for the usual state programs. The benefits also had the Pandemic Emergency Unemployment Compensation. It gave more benefits to people who had exhausted the regular state insurance. By mid-August, nearly nine million people in America were availing the benefits of one of these programs. This comprised the majority of the people claiming unemployment benefits during that period.
Several policymakers and economists have shown that these increased federal unemployment benefits may bring a wider return to work. But other people are not so sure. They think that the latest wave of the coronavirus may further hamper the return to work of these unemployed people. "Unfortunately, Delta appears to have left workers uncomfortable returning to the workforce," Bank of America economist Michelle Meyer said a few days ago. "All eyes are on whether the broader expiration of UI [unemployment insurance] benefits will prompt greater labor participation in the coming weeks."
The previous week was the first time since the federal thumbs up to UI payments ended. The federal government had been enhancing the benefits with a weekly expansion of $300. This was since the Democrats passed a $1.9 trillion stimulus package in March. The expiration cut is advantageous for nearly 7.5 million citizens of the country. The federal government has stated that states can use the stimulus funds to give extended benefits. But none of the state governments has planned to do so till now. But the hopes of a new supplement are still alive.
Rep. Alexandria Ocasio-Cortez has said that she will introduce a bill that will help to extend the UI programs for six months more. It is still unclear whether the bill will get the support it requires to be passed by Congress. The representative said she "simply could not allow this to happen" without reviving the programs. "I have been very disappointed on both sides of the aisle that we have just simply allowed pandemic unemployment assistance to lapse completely when we are not fully recovered from the consequences of the pandemic," Ocasio-Cortez added in a statement.
Meanwhile, the retail sales have increased 0.7% in August, as per the Commerce Department. Even after the Delta variant created some impact, there were restrictions renewed in many places. The people have kept up their spending even with the renewed impact of this new variant of the coronavirus. Consumer spending accounts for nearly 70% of the economic activity in the country. The sales were still below their figure for April when good highs had been achieved. But this sudden gain in August shows that the recovery has stayed put despite the comeback of the virus.
Consumer spending is robust in the country. But the pandemic has impacted how they are spending their money. Online shopping has seen an increase in August. But spending at bars, restaurants, and other businesses that are heavily dependent on the crowds has remained the same. It seems that the spending will not see any gains for some time to come in this segment.
The weekly jobless claims increased by nearly 4,000 in the state of Louisiana. This shows that Hurricane Ida caused a lot of job losses in the area. The hurricane has probably damaged the growth of the economy in the present quarter. But the rebuilding and repair efforts are looking to make up for a lot of that in the months ahead. The hurricane shut down oil refineries in Mississippi and Louisiana a couple of weeks ago. This has rendered more than a thousand businesses and homes without any electric power. But the hurricane's impact was limited everywhere else. The weekly jobless claims were reduced by a little in the state of Mississippi.
The weekly jobless claims have shown noticeable increases in the states of District of Columbia and Arizona. Overall, weekly jobless claims decreased in more than 30 states. This includes big decreases in Texas, Ohio, and Illinois. The number of citizens getting state jobless benefits decreased by 2.67 million to 187,000. These numbers represent a pandemic-era low for continuing weekly jobless claims. The wider economy and the job market have been slowed down a little in recent weeks by the latest variant of the coronavirus. This has discouraged many people in the country from eating out, staying in hotels, or traveling.
Earlier this month, the federal government had said that employers had added only 235,000 jobs in August. They had added nearly a million jobs in June and July each. The hiring in August reduced drastically in industries that need face-to-face contact with the consumers. This includes retailers, hotels, and restaurants. Still, a few jobs were added in other segments. The rate of unemployment reduced by 0.2%. There has been a steady fall in weekly jobless claims. This matches with a scaling-back of all the extended benefits for the unemployed people of this country.
Last week, nearly eight million people lost access to pandemic-related unemployment benefits. The federal programs that took care of people who had been unemployed for more than half a year and gig workers expired. These programs were developed in March last year. This was when the coronavirus had its initial impact on the economy. Nearly 2.7 million people who were getting regular state unemployment benefits lost out on a federal unemployment supplement.
The initial weekly jobless claims had reached their lowest mark this month since the start of the pandemic in March 2020. This was because employment speed has increased, and the newly unemployed people have come closer to the levels present during the pre-pandemic era. Nearly two years ago, the initial weekly jobless claims were nearly 220,000 every month. The four-week moving average for weekly jobless claims had also gone to its lowest level in one and a half years. It touched nearly 335,750 last week. This figure shows that there has been some smoothening in the volatility of the weekly figures. The figure has also been on a downward road throughout this year.