Americans who filed for new jobless claims fell last week. This coincided with the fact that layoffs dropped to a record low in the last 24 years. All in all, August job numbers point to a supercharged job market despite the resurgence of COVID-19.
New Jobless Claims Fall To 340,000
The US Department of Labor reported that new jobless claims for unemployment benefits in August totaled 340,000. This figure is around 14,000 lower versus July and presents the lowest in 24 years.
The August numbers remained above the 200,000-250,000 range. In addition, continuing jobless claims dropped by 160,000 to 2.748 million, a 17-month low. In contrast, the highest number of jobless claims totaled 6.15 million in April 2020.
Economists see the lower unemployment numbers as consistent with healthy labor market conditions. In addition, declining layoffs also point to an improving economy, even as the numbers show a slowdown in nonfarm payrolls growth.
Chris Rupkey, the chief economist at FWDBONDS, said that COVID is now becoming less of a factor. “Regardless of tomorrow’s report, keep in mind that the weekly jobless figures say the labor market screws continue to tighten.
There is no sign that the Delta variant is leading to job losses across the country,” he said. Notable among the states with declines in jobless claims are California, Illinois, and Virginia. In contrast, Ohio and Missouri reported increased jobless claims.
Economists Expected COVID-19’s Delta Variant To Affect Labor Market
Economists assumed that the surge of COVID-19 cases pushed by the Delta variant will affect the labor market. Additionally, a shortage of workers in some industries made experts think of a lower rise in jobs.
Indicators last month show mixed feelings. Factory employment contracting and private payrolls showed underwhelming expectations. However, these were offshoot by a rise in small business hiring. As a result, consumer views of the labor market remained upbeat.
However, the pandemic still makes its presence felt in the labor market. The fear of COVID-19 helped create worker shortages in some sectors.
In a rare scenario, the US posted 10.1 million job openings even as 8.7 million Americans are looking for work. Many workers held off getting back to the grind due to several factors.
These include the fear of getting infected, stress from non-compliant customers. lack of affordable childcare, and generous unemployment benefits.
Job Cuts Also Decreased
A separate report from global outplacement firm Challenger, Gray & Christmas showed that US company job cuts decreased by 17% to 15,723 in August. This is the lowest of cuts since 1997. Compared to last year, US employers announced 87% less job cuts so far this year at 247,326.
Meanwhile, nonfarm payrolls likely increased by three-quarters of a million in August. The month before, nonfarm jobs rose by almost a million at 943,000. “We expect the jobs report to show that the economy continued to add jobs at a rapid pace in August, defying COVID-19 Delta variant outbreaks across the country,” said Julia Pollak, chief economist at ZipRecruiter.
As federal programs providing extra unemployment benefits expire later this week, the government expects many more Americans to get back into the job market.
Currently, 12.2 million Americans receive jobless benefits from both federal and state. By next, some 7.5 million Americans will either have to find a job or live with a lower government handout.
Watch the Bloomberg Markets and Finance video reporting that US initial jobless claims fall to new pandemic low:
What do you think about the lower numbers of jobless claims across the country? Do you see that as a good sign, or do you think it’s something else?
Let us know what you think about America’s current labor market. Share your comments below.