Weekly jobless claims in the United States fell below 300,000 the week that ended on October 9th. This is the first time claims have fallen under 300,000 in 19 months. Claims fell by 36,000, when compared to the week before; the total for the week stands at 293,000 claims. Meanwhile, continuing claims decreased by about 134,000 to 2.593 million.
This latest data is a boost towards labor market recovery, and the economy as a whole. For the first time in 19 months, the weekly jobless claims are now in a healthy range that is normal for a healthy, functioning labor market and economy. Of course, the labor market still has quite a few issues to work out — but it appears that workers being laid off consistently each week will no longer be a problem, or shouldn’t. Â
When the COVID-19 pandemic began in 2020, many workers were laid off and had to file for unemployment. In April of 2020, weekly unemployment claims hit a record high of 6.149 million. The last time claims were this low was in March 2020, when the country was still in the beginning stages of the COVID-19 pandemic. This is also the biggest weekly drop in claims since June 2021.
The labor market, however, still has a few obstacles keeping it from full recovery. For example, labor and raw material shortages are greatly impacting business activity around the nation. Labor shortages have kept many businesses from meeting high consumer demand, just as raw material shortages have. While many economists are optimistic that each new month will see more workers reenter the workforce, this hasn’t yet occurred.Â
Many economists initially thought that many workers would return to work this summer. However, when this didn’t occur, it was then thought that once school began again and students returned to attend school (rather than virtually attend), more workers who didn’t have childcare would finally return. This also hasn’t necessarily occurred to the mass degree expected.
For example, the last few schools remaining finally began their fall semesters in September. However, only 194,000 new job hires were recorded, according to the Labor Department, for the whole month of September. While it’s always possible that these jobs will appear in October’s data, the very low amount of workers being hired signals that we still have weeks to months of labor shortages ahead.
There are also many signs that the economy is slowing down, possibly for many reasons. A few weeks ago, this could’ve been because of the surge in COVID-19 cases because of the highly contagious Delta variant. Now, the economic slowdown could be because of these labor and raw material shortages.Â
This latest data about the weekly jobless claims may hint that employers are becoming very reluctant to lay off workers amid this nationwide labor shortage. Decreases for the week occurred in Florida, Texas, and Tennessee. However, claims did increase in many other states, such as California, Kentucky, Maryland, Missouri, and Michigan.
