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Jobless Claims Sink to 326K as Delta-Variant Fades

This morning???s weekly Initial Jobless Claims numbers fell back toward a post-Covid low of 326K.

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This story originally appeared on Zacks

Thursday, October 7, 2021



Another good turn for the labor market came from this morning’s weekly Initial Jobless Claims numbers, which fell back toward a post-Covid low of 326K. This was below the 348K expected by analysts, as well as the slightly upwardly revised previous week’s tally of 364K, which happened to be a 7-week high on new jobless claims. The post-Covid low of 312K the week of Labor Day this year is the mark these weekly claims are shooting for.



Negative effects from the Delta variant of Covid-19 and the devastation wreaked by Hurricane Ida saw these weekly numbers bumping higher over the past month or so, but today’s new headline asserts that these challenges are now on the wane. Other Delta-variant confirms this, and vaccine expert/Pfizer board member Dr Scott Gottlieb says he believes the Delta variant is the last gasp for the spread of Covid in this country.



Continuing Claims did drop to a post-Covid low at 2.714 million, down from the slight upward revision to the previous week’s 2.81 million. As these longer-term claims report a week in arrears, we may expect even lower figures hitting the tape this time next week. Yet another positive sign for the U.S. labor market, which reportedly still has roughly 5 million fewer Americans working than prior to the pandemic.



These weekly jobless claims numbers are sandwiched between two important monthly employment reports — yesterday’s ADP ADP private-sector jobs totals and tomorrow’s nonfarm payrolls reported by the U.S. government. The ADP headline was also better than expected at 568K — a strong monthly job gains number, especially this far into the Great Reopening recovery, which began in earnest amid vaccine access in the early part of this year.



Expectations currently are for half a million new jobs created in the month of September from the U.S. Bureau of Labor Statistics (BLS), which would more than double August’s disappointing 235K job gains reported a month ago. The Unemployment Rate is expected to tick down from 5.2% last time around to 5.1%, which would represent as new post-Covid low of its own. Growth in Average Hourly Earnings is expected to cool somewhat, however: +0.4% from a hot +0.6% reported last month.



Later today, we’ll see a report on Consumer Credit from August. Expectations are for an in-line read of $17 billion, the same as what was reported the previous month. We’ve already seen savings rates dipping in favor of more spending (whether due to higher demand, higher prices or both) in other consumer metrics of late; if we see anything other than a relatively steady number here it may mean something to the stock market, though it’s unlikely.



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