Jobless Claims Rise as Pandemic Fears and Supply Chain Crunch Weigh on Recovery
First-time filings for unemployment insurance-a proxy for layoffs-came in at 332,000 for the week ending Sept. 11, a rise of 20,000 from the previous week's revised level of 310,000.
The number of American workers who filed for unemployment rose last week after touching a pandemic-era low in the prior week, with the spread of the Delta variant and supply chain issues weighing on the labor market recovery.
First-time filings for unemployment insurance—a proxy for layoffs—came in at 332,000 for the week ending Sept. 11, a rise of 20,000 from the previous week’s revised level of 310,000, the Labor Department said in a release (pdf). The consensus forecast cited by FXStreet was for 328,000 claims.
“On the face of it, it is disappointing but not entirely surprising to see a slight increase in new jobless claims given the toll taken by the Delta variant. Countering that somewhat is the decline in continuing claims to a fresh pandemic era low,” Bankrate senior economic analyst Mark Hamrick told The Epoch Times in an emailed statement.
Continuing claims, which run a week behind the headline number and represent people continuing to collect benefits after earlier making an initial filing, fell by 187,000 to 2,665,000, a pandemic-era low.
“The good news for American workers is that fresh job losses remain relatively muted. There’s strong demand for workers across a wide variety of sectors, lending to job and income security,” Hamrick said.
Job openings in the United States surged to a record high of 10.9 million on the last day of July, while hiring lagged that figure by more than 4 million, painting a picture of an economic recovery held back by businesses struggling to fill vacant positions. There are now 2.5 million more job openings than unemployed people in the United States, with the Labor Department’s most recent jobs report showing that the total number of unemployed edged down to 8.4 million in August while the unemployment rate edged down to 5.2 percent.
The jobless claims data comes as investors look to next week’s Federal Reserve policy meeting that could provide clues as to the timeline for the central bank to begin paring back its massive bond-buying program. Fed officials have been discussing when to start tapering the Fed’s $120 billion in monthly Treasury and mortgage security purchases, with the labor market recovery a key touchstone. While tapering is expected to start this year, the timing of the announcement, as well as the pace of the wind-down, hasn’t yet been settled.
Patrick Harker, president and CEO of the Federal Reserve Bank of Philadelphia, told Nikkei in an interview on Sept. 13 that the disconnect between record-high job openings and the millions still unemployed is driven by a range of factors, including fears related to the outbreak.
“The supply issues are due to a myriad of factors, but first and foremost is people, whether they’re worried about their children or elder care, or they’re fearful to go back into the workplace or to get on mass transit in major cities to get to the workplace,” Harker said.
He told the outlet that he favors moving quickly toward a taper announcement.
“I am supportive of moving toward a tapering process sooner rather than later. When exactly that happens, the committee needs to decide. I would hope sometime this year we would be able to start the tapering process,” Harker said, referring to the Federal Open Market Committee (FOMC), the Fed’s monetary policy setting body, which is scheduled to meet on Sept. 21-22.
By Tom Ozimek
Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The best writing advice he's ever heard is from Roy Peter Clark: 'Hit your target' and 'leave the best for last.'
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