[ad_1]
Driven by the surge in California and Virginia, the number of new U.S. workers applying for unemployment benefits unexpectedly increased last week, but the basic trend is consistent with the steady recovery of the labor market.
The US Department of Labor’s announcement on Thursday that the number of jobless claims has risen for the second consecutive week has puzzled economists. Some blamed California’s wildfires, while others blamed Hurricane Ida, which destroyed American offshore energy production in late August. Few people believe that the persistent COVID-19 infection driven by the highly contagious Delta variant of the coronavirus is a factor.
Daniel Silver, an economist at JPMorgan Chase in New York, said: “Part of the recent rebound seems to be related to Hurricane Ida, because Louisiana’s applications in recent weeks have been higher than the pre-storm trend.” “But even if it includes For any storm-related claims, the recent increase in applications does not seem to be particularly serious so far. We believe that the recovery of the labor market has not derailed at this point.”
As of the week of September 18, the number of initial jobless claims increased by 16,000 to 351,000 after seasonal adjustment. Economists surveyed by Reuters predict that 320,000 people will apply in the past week.
California’s unadjusted initial jobless claims increased by 24,221, while Virginia’s increased by 12,879. Oregon, Ohio, and Kentucky also experienced significant growth. The number of unemployment benefits in Louisiana has fallen and has been higher than the pre-hurricane trend in recent weeks.
“Maybe the lingering effects of the California fire and Ida, Virginia have caused these growth, but we are not sure,” said Nancy Vanden Houten, chief UD economist at the Oxford Institute for Economic Research in New York. “We expect claims to return to decline in the next few weeks, but as claims get closer to pre-pandemic levels, the data will become more uneven.”
The 4-week moving average of the number of people applying for unemployment benefits last week is considered to be a better indicator of labor market trends because it eliminates weekly volatility and fell by 750 to 335,750 last week. This is the lowest level since mid-March 2020, when the country was hit by the first wave of coronavirus cases and forced to close non-essential businesses.
The number of initial jobless claims has fallen from a record of 6.149 million in early April 2020, but is still higher than the range of 200,000-250,000, which is considered to be in line with healthy labor market conditions.
The Fed issued an optimistic statement on the economy on Wednesday, paving the way for a “soon” reduction in monthly bond purchases, and hinted that interest rates may increase faster than expected.
A survey conducted by data company IHS Markit on Thursday showed that business activity grew at the slowest rate in a year in September as companies struggled with continued shortages of raw materials and labor.
But the slowdown may be temporary. The third report of the Consultative Chamber of Commerce shows that its Leading Economic Index (LEI, a measure of future US economic activity by the Consultative Chamber) rose by 0.9% in August after rising 0.8% in July. The Chamber of Commerce said, “The LEI trend is consistent with the strong economic growth reminded this year.”
Wall Street stocks are higher. The dollar fell against a basket of currencies. The price of U.S. Treasury bonds fell.
Shortage of workers
Last week’s application data covers the period when the government surveyed employers on the number of non-agricultural employment in the September employment report. During the non-agricultural employment survey in August and September, there was almost no change in the number of people applying for unemployment benefits.
Employment growth slowed in August, due to stagnant recruitment in the high-touch leisure and hotel industry, employment numbers recorded the smallest increase in seven months.
The claim report also shows that in the week ending September 11, the number of people who continued to receive benefits after the initial week of assistance increased by 131,000 to 2.845 million. Data on the so-called continuing claims next week will provide more clues about the employment situation in September.
Factors related to the pandemic are leading to a shortage of workers, thus limiting recruitment. Federal Reserve Chairman Jerome Powell told reporters on Wednesday that he expects “job growth will be faster” because these factors (including lack of affordable childcare and concerns about contracting the coronavirus) are declining.
At the end of July, there were a record 10.9 million job openings. The Fed expects an unemployment rate of 4.8% this year. This is higher than the 4.5% interest rate predicted by the Federal Reserve in June. The unemployment rate in August was 5.2%.
It is cautiously optimistic that after the government-funded unemployment benefit expires at the beginning of this month, the labor contraction will ease, and companies and Republicans accuse the benefit of encouraging the unemployed to stay at home.
In the week ending September 4, at least 11.25 million people received all unemployment benefits. According to Andrew Stettner, a senior researcher at the Century Foundation, more than 8 million people have lost all their pandemic relief funds.
However, this is unlikely to increase labor reserves. Approximately 25 states led by Republican governors ended early in the summer with extended benefits that did not lead to a surge in recruitment in these areas, and the delta variant may cause some people to be reluctant to return to work.
“For the labor market, the recovery is still going on, but the shortage of supply is still a headwind,” said Ruby Lafaruci, chief U.S. economist at High Frequency Economics, White Plains, New York.
There are signs that this year’s holiday recruitment may also be different. Retail companies usually arrange personnel to cope with the rush of the holiday. The holiday starts the day after the Thanksgiving holiday in November, including Christmas in late December, and usually ends in early January.
Target Corp said on Thursday that it plans to hire 100,000 seasonal workers this year, about 30,000 fewer than last year, in preparation for the holiday.
The company said that instead of hiring more seasonal workers, it would provide more working hours for its more than 350,000 current employees during busy periods, thereby increasing their salaries by approximately $75 million.
Rival retailer Wal-Mart said it plans to hire 20,000 employees for its supply chain department before the holiday.
[ad_2]
Source link