August 11, 2022

U.S. Jobless Claims Extend Decline to New Pandemic Low

Worker filings for jobless benefits fell again to a fresh pandemic low, extending a steady downward trend and adding to signs of a healing labor market and a broader, though uneven, economic recovery.

Initial unemployment claims for regular state programs, a proxy for layoffs, fell last week to 406,000 from 444,000 the prior week, the Labor Department said Thursday. That level represents the lowest levels of claims since the coronavirus pandemic’s onset last year and the fourth consecutive week claims have reached a new pandemic low. Economists surveyed by The Wall Street Journal had forecast there were 425,000 new claims last week.

A separate report from the Commerce Department showed orders for cars, appliances and other long-lasting, or “durable,” goods fell a seasonally adjusted 1.3% in April from March—the first monthly decline in demand for such products in a year. The decline was concentrated in the automotive sector, where a semiconductor shortage has caused disruptions, and the defense industry, which tends to be very volatile. Shipments of motor vehicles and parts fell sharply as well, while shipments of defense capital goods rose.

Low business and retail inventories have translated to increased demand for manufacturers for much of the past year, but supply-chain issues continue to constrain production and delay some shipments.

Excluding transportation, durables orders were up 1% in April and excluding defense, they were unchanged from March. Orders for nondefense capital goods excluding aircraft—also known as core capital goods, a proxy for business investment—increased 2.3% in April.

“In short, notwithstanding the headline figure, this report points to ongoing explosive expansion,”

Stephen Stanley,

chief economist at Amherst Pierpont Securities, said of the durable goods figures in a note to clients.

U.S. gross domestic product, a broad measure of the economy’s output of goods and services, rose in the first quarter at an annual rate of 6.4%, unrevised from the initial estimate, according to another Commerce Department report. Consumer spending, the economy’s key driver, was revised up to an annual rate of 11.3% in the first three months of the year.

Taken together, Thursday’s data point to a labor market that is gaining strength as Covid-19 cases steadily decrease, more Americans receive vaccines against the virus and governments ease restrictions on businesses, although the broader economic recovery remains uneven.

“I think there’s still a lot of pain out there, but the good news is that it really looks like the economy is kicking into overdrive, and I do see positive signs for the job market,” said

Beth Ann Bovino,

chief U.S. economist at S&P Global Ratings.

U.S. employment overall is down by more than eight million jobs compared with pre-pandemic levels. Meanwhile, initial jobless claims remain higher than before the pandemic. The number of Americans continuing to receive unemployment benefits through regular state programs fell to 3.6 million in the week ended May 15, after rising the previous week.

What Happens When You Lose Your Job?

As of early May, nearly 16 million Americans were continuing to claim benefits through all unemployment programs, including special programs designed to support workers through the pandemic. Some businesses and Republican lawmakers have recently expressed concern that a federal pandemic program that provides benefit recipients with a $300 weekly supplement may be constraining employers’ ability to hire workers.

Roughly two dozen states, all led by Republicans, have announced they will end the supplement this summer, ahead of its scheduled expiration in early September.

Research from the jobs site Indeed.com measured those states’ share of national job search activity, as reflected in clicks on job postings, after they announced the plans to end the supplement early. The research found job search activity in those states increased immediately after the announcements. However, the rise was fleeting, the research found, and within eight days returned to prior levels.

Surveys suggest the benefits are among several reasons many workers remain out of the job market, despite continued high unemployment. Other reasons include fears of contracting Covid-19, schools remaining closed or only partially reopened, and lack of skills needed for the available positions. The Labor Department reported employers added just 266,000 jobs last month, compared with the one million economists had expected.

Tim Bridges, owner of The Cleaning Authority in Troy, Mich., said demand for his company’s services has been picking up recently, but that he hasn’t been able to take on new customers quickly because of limited staff.

He said some workers who have turned down his job offers cited enhanced unemployment benefits. Mr. Bridges last year raised the company’s starting wage to $15 an hour, and he said he recently changed company policies to offer staff more flexible schedules in an attempt to attract additional workers. He said he has hired five new workers over roughly the past two months, bringing his total number of staff to 28, but is still looking for more.

“It’s a more competitive marketplace to find employees. We’re doing everything we can,” he said.

Mr. Stanley, of Amherst Pierpont Securities, said he expects the Labor Department to report next week that employers added 700,000 jobs in May. He said constraints on the supply of labor should ease as enhanced unemployment benefits end, more people become vaccinated and schools reopen, potentially reducing some Americans’ lingering health and child-care concerns.

“I think more and more people will get out there and search for jobs and that should help both alleviate stress in the job market and accelerate the pace of reported job gains,” he said.

Supply-chain disruptions are likely also limiting companies’ ability to hire, said

Robert Frick,

corporate economist at Navy Federal Credit Union. He said employers must also adjust to a hiring landscape that is fundamentally altered because many workers’ preferences and habits have changed over the course of the pandemic.

“When something crashes in the economy, it’s going to be built back differently. Right now, we’re in the process of figuring out what’s the same and what’s different,” Mr. Frick said. “People are figuring out, ‘Is my job gone for good?’ and may also be thinking, ‘Do I want to go back to my job?’ ”

Write to Amara Omeokwe at [email protected]

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Related Posts

Trump Organization CFO Allen Weisselberg Surrenders to Authorities

July 1, 2021

July 1, 2021

The Trump Organization’s finance chief Allen Weisselberg surrendered to New York prosecutors Thursday morning as he and the company’s lawyers...

The Fed’s Inflation View Is All About That Base

June 6, 2021

June 6, 2021

Federal Reserve officials are talking a lot these days about base effects. That relates to how the economy looks now...

Trumps Selling Prized Washington, D.C., Hotel for $375 Million

November 15, 2021

November 15, 2021

Donald Trump’s family hotel company has reached an agreement to sell the rights to its Washington, D.C., hotel for $375...

Nike Posts Highest Quarterly Sales in Its 50-Year History

June 24, 2021

June 24, 2021

Nike swung to a profit of $1.51 billion for the quarter ended May 31. Photo: florence lo/Reuters Updated June 24,...

Amazon’s Planned Purchase of MGM to Be Reviewed by FTC

June 22, 2021

June 22, 2021

WASHINGTON—The Federal Trade Commission will be the agency to review Amazon. AMZN 1.41% com Inc.’s proposed acquisition of Hollywood studio...

Biden Weighs New Executive Order Restraining Big Business

June 29, 2021

June 29, 2021

The Biden administration is developing an executive order directing agencies to strengthen oversight of industries that they perceive to be...

Democrats Strain to Unify on Proposal to Reduce Drug Prices

June 3, 2021

June 3, 2021

Congressional Democrats are ramping up efforts to reach a deal on legislation to lower the cost of prescription drugs, but...

Tesla Shareholder Panasonic Sells Stake for $3.6 Billion

June 25, 2021

June 25, 2021

TOKYO— Tesla Inc.’s leading battery supplier is no longer a Tesla shareholder. Panasonic Corp. said Friday it has sold its...

The World Relies on One Chip Maker in Taiwan, Leaving Everyone Vulnerable

June 19, 2021

June 19, 2021

The company makes almost all of the world’s most sophisticated chips, and many of the simpler ones, too. They’re in...

Amazon Got Us Hooked on One-Day Delivery—Now Small Businesses Are Paying for It

June 12, 2021

June 12, 2021

Things had been looking good for Charleston Gourmet Burger, a small family business based in South Carolina. Founded by husband-and-wife...

Can America’s Solar Power Industry Compete with China’s? One Firm Tries.

June 21, 2021

June 21, 2021

WALBRIDGE, Ohio—Solar panels are part of any formula for fighting climate change, yet the U.S. makes few of them, since...

Yellen Says U.S. Could Breach Debt Limit Deadline in August if Congress Doesn’t Act

June 23, 2021

June 23, 2021

WASHINGTON—The U.S. could run out of room to keep paying the government’s bills some time during Congress’s August recess unless...

U.S. Job Openings Reached Record Level This Spring

June 8, 2021

June 8, 2021

Available jobs in the U.S. climbed further above pre-pandemic levels last month following a record surge earlier in the spring,...

Small Business Needed Federal Help. The Agency in Charge Fell Short.

June 17, 2021

June 17, 2021

In the pandemic shutdown last year, three-quarters of the nation’s small employers turned to the Small Business Administration for help....

WhatsApp Says It Filed Suit in India to Prevent Tracing of Encrypted Messages

May 26, 2021

May 26, 2021

Facebook Inc.’s FB 0.97% WhatsApp said it filed a lawsuit in India to stop new government rules that would require...