Economic Report: Jobless claims dip to pandemic low of 268,000 as labor shortage forces businesses to avert layoffs
The numbers: The number of people who applied for unemployment benefits in mid-November fell for the seventh straight week and are heading toward pre-pandemic lows due to the biggest labor shortage in decades.
New filings for jobless benefit slipped by 1,000 to 268,000 in the seven days ended Nov. 13, the government said Thursday.
Economists polled by The Wall Street Journal had estimated initial jobless claims would total a seasonally adjusted 260,000.
Unemployment filings are hurtling toward pre-crisis lows, when they were in the low 200,000s. They totaled as much as 900,000 a week at the start of the year.
Companies are only laying off workers as a last resort owing to the labor shortage. Some 10 million-plus jobs are available and businesses can’t fill most of them.
Read: ‘My business faces a dire shortage of workers,’ owner tells Congress
Big picture: The economy has sped up since a delta-related dropoff at the end of summer, but it can’t grow much faster unless a lot more people go back to work. Some companies have had to scale back production or business hours because they don’t have enough staff.
The labor shortage is unlikely to ease up quickly, however, especially with the coronavirus prevalent in the Northeast and Midwest. Millions of people are still reluctant to return to work or may have left the labor force permanently.
Read: U.S. retail sales jump 1.7%, but high inflation plays role
Key details: New jobless claims fell the most last week in Kentucky, Michigan, Tennessee and Ohio, all states with large auto-producing industries.
Carmakers have had to temporarily shut some plants due to parts shortages and idle workers. These employees are can be eligible for jobless benefits when they aren’t working.
The only state to post a big increase in jobless claims was California. New unemployment filings were little changed in most other states.
The number of people already collecting state jobless benefits, meanwhile, declined by 129,000 to 2.08 million. These so-called continuing claims are also at a pandemic low.
Altogether, 3.18 million people were reportedly receiving jobless benefits through state or federal programs as of Oct 30. That marks a sharp uptick from 2.56 million in the prior week.
Most of the gain stemmed from California processing a backlog of claims from earlier in the year.
Just under 2 million people were collecting unemployment benefits before the pandemic.
What they are saying? “Claims still have some way to go before reaching pre-pandemic levels, but we’re on our way,” said chief economist Scott Brown of Raymond James.
Market reaction: The Dow Jones Industrial Average
fell slightly, but the S&P 500
rose, in early Thursday trades. Stock prices have been hitting record highs.