The number of citizens filing new weekly jobless claims for benefits decreased by the maximum this week in the past few months. This shows that the labor market recovery was gaining momentum after a slowdown recently. This is because the wave of coronavirus infections has started to decline. The initial weekly jobless claims for state unemployment benefits declined by 38,000 to an adjusted figure of 326,000 for the week ended October 2. This represents the largest decrease in the past six months. Experts had predicted the weekly jobless claims to be 348,000. The unadjusted weekly jobless claims are said to give a better reading of the labor market. It declined to 258,909 last week. This represented a decrease of 41,431.
The weekly jobless claims report from the Labor Department is one of the best indicators of the economy's health. It also showed that the number of citizens on state unemployment rolls declined to the lowest in September's past one and a half years. The labor market conditions are improving. This bodes well for the weekly jobless claims report that is watched closely by the Federal Government. It has also given a boost to the Federal Reserve. It has signaled the previous month that it could decrease its monthly bond-buying starting as early as next month. Christopher Rupkey, the chief economist at FWDBONDS, said, "The labor market is back on track after a few weeks of rising claims threw a question mark into the markets' understanding of just how solid the economic outlook is. The Fed has the evidence it needs to start paring back its emergency stimulus purchases when it meets next month."
California had the biggest decrease in claims the previous week. There were also decreases in Missouri, Washington DC, Ohio, and Michigan. There was marked growth in weekly jobless claims in Virginia and Pennsylvania. Some growth in the weekly jobless claims was due to the idling of assembly plants in some states because automakers have to manage their stock of semiconductors due to an international shortage. There has been a growth in coronavirus infections. These have been due to the Delta variant. This has also hampered activity in the services sector which requires high contact between people. This shows some moderation in the labor market conditions in the previous weeks.
This was also shown by a different report by international outplacement business Challenger, Gray & Christmas. They stated that job cuts by national employers grew to nearly 17,900 last month. This was an increase of 14%. But the layoffs had decreased by 85% compared to the same time last year. Employers had more than 52,500 job cuts in the third quarter. This was the lowest since the second quarter 25 years ago and a decrease of 23% from July to September. The shares on Wall Street were trading higher. The dollar fell against the basket of currencies. The US Treasury prices saw a decrease.
The layoffs in the previous month were mainly due to the firms in the products or healthcare sector. There were nearly 2,700 approved job cuts. The Pfizer vaccine has obtained full-FDA approval. Several healthcare facilities have installed the vaccine mandates. This has led to non-compliant workers losing their jobs. The ongoing strains in the supply chain experienced industrial goods manufacturers firing more than 2,300 workers last month. The warehousing businesses saw job cuts of more than 1,900. There were nearly 1,700 job losses in the services sector. A boost in planned hiring increased the growth in layoffs. This was in part as retailers looked ahead to the holiday season. The report by Challenger shows that firms have announced plans to hire nearly 940,000 workers compared to only 94,000 in August.
The firms are excited to hire, and more citizens are coming off the weekly jobless claims rolls. The weekly jobless claims report shows that the number of citizens continuing to get benefits after the first week of aid decreased by 97,000 to 2.714 million for the week ended September 25. This was the lowest level since March of the previous year. The number of citizens getting unemployment benefits under all programs has dropped drastically since the beginning of the previous month. This has been due to the end of extended benefits, which happened the previous month. Experts predict that will lead to a growth in the labor pool.
The pandemic has seen some citizens quit their jobs to become caregivers. Other people are reluctant to resume work because they think that they will be infected with the coronavirus. Some others are looking for career changes or have retired. This had rendered employers desperate to employ nearly 11 million job openings by the end of July. The shortages in labor have impacted job growth. But there is optimism that hiring has increased in the previous month. Experts claim that the nonfarm payrolls grew by half a million jobs last month. The estimates range from as low as 250,000 to as high as 700,000 jobs. This shows the mixed labor market indicators last month.
The previous week, a survey from the Conference Board showed that the consumers' views of the present labor market conditions have softened. The Institute for Supply Management's measure of manufacturing employment made a comeback the previous month after decreasing in August. But the measure of services industry employment declined. "Going forward, the combination of easing labor supply constraints, strong labor demand, and an improving COVID outlook should spur further labor market progress," stated Lydia Boussour, an economist at Oxford Economics.
California Sees Decreases in Weekly Jobless Claims
In the previous month, the weekly jobless claims had grown for several weeks in a row in California. This was because citizens were moving to another program after the ending of the federal government extended unemployment aid. They wanted to increase their access to unemployment benefits. The transfer allowed the beneficiaries to get one more week of benefits. This increased weekly jobless claims, even though it showed an existing claimant going from one program to the other. But as things look to settle down now, the weekly jobless claims this week have seen a decline in California.
Andrew Challenger, senior vice president at Challenger, Gray & Christmas, said, "Healthcare is facing an enormous talent shortage. Other systems are facing walk-outs or firings of unvaccinated staff, further broadening the worker shortage. In some cases, a lack of staff leads to the closing of entire units causing involuntary job loss."
The ongoing constraints in the supply chain are damaging the labor market. The industrial goods manufacturers had numerous layoffs in the previous months. The case was similar to the warehousing businesses. There were a similar amount of high job cuts in the services sector. But the increase in layoffs is dwarfed by a boost in planned hiring. This was partly due to the retailers getting ready for the holiday season comprising Thanksgiving and Christmas.
The weekly jobless claims are now experiencing a steady decline after some period of turbulence. This has been due to several reasons. One of them can be attributed to the decrease in the coronavirus cases in the nation and the removal of anxiety from the minds of many citizens to return to the workforce. The other is the increase in job openings by businesses and the increase in labor market requirements despite the supply chain constraints.