Weekly jobless claims in the United States fell close to an 18-month low on the week that ended on September 4. Claims dropped by about 35,000 to a seasonally adjusted 310,000. This is the lowest weekly claims have been in nearly 18 months, when claims were low in the middle of March 2020. As weekly jobless claims continue to drop with each passing week, this could be a sign that the labor market recovery is right on track.
For the past few weeks, however, every week hasn’t been a drop in claims. Here and there, there would be weeks where the claims would actually rise in number. This is expected, as recovery tends to fluctuate. Now, economists are optimistic that these latest weekly claim numbers will truly signal a shift in labor market recovery.
Currently, in regards to the labor market, fewer people are being laid off and facing unemployment, especially when you look at the high unemployment numbers in 2020 and earlier this year in 2021. For example, in April of 2020, weekly jobless claims hit 6.149 million. Therefore, the labor market has come a long way since then.
A healthy labor market only has about 200,000-250,000 weekly jobless claims. As the United States is now at 310,000, this is good news for the economy and the labor market as a whole.
However, there are still a few problems that may hold back labor market recovery. While fewer workers are being laid off and being forced to apply for unemployment benefits, there aren’t a lot of workers returning to the workforce as initially thought, which has created a huge labor shortage around the country. Consumer demand, though it has slowed down a bit in the last few weeks, has surged — and many businesses have struggled to accurately meet this demand with few workers working.
Many economists anticipate that more workers in the United States will return to the workforce in the coming months of fall. As more students return to school, it is expected that more workers will return to the workforce. Many Americans have struggled to find accurate childcare services over the summer, which has kept many at bay from returning to work. Therefore, it is thought that the beginning of school will allow many to once again seek jobs.
While many school districts around the country already started school again, some areas do not begin the fall semester until September. Data showing more people returning to work may not appear until late September or October, as a result.
This recent jobless claim news comes amid other reporting revealing that there are more job openings in the United States than ever before. Job openings around the country have hit a record high, and while unemployment hasn’t necessarily risen too much in the last few months, unemployment numbers also haven’t drastically decreased as initially expected.
These recent jobless claim filings also come amid natural disasters in the south and elsewhere in the country. While weekly jobless claims surged in Louisiana in the aftermath of Hurricane Ida, jobless claims in the country as a whole still decreased. Big decreases in filings were seen in Florida, Georgia, Missouri, New York, and Tennessee.