US weekly jobless claims fall to new pandemic low Business and Economic News
The number of Americans filing new jobless claims fell further below 500,000 last week, but jobless jobs swelled in early May, which could dampen expectations of accelerating growth in May. employment this month.
Other data from Thursday showed factory activity in the Mid-Atlantic region growing at a significantly slower pace this month, likely due to labor and raw material shortages . An employment measure fell for factories in the region that covers eastern Pennsylvania, southern New Jersey and Delaware. But companies have increased the hours of workers.
The US economy is reopening after being severely disrupted by COVID-19 for more than a year. But pent-up demand triggered by the widening economic re-engagement is pushing against supply constraints, threatening to slow the recovery from the recession from the coronavirus pandemic, which began in February 2020.
âIf the data is taken at face value, it would suggest both a reduction in layoffs and a slowdown in hiring, which, given the rising level of demand for labor, could not be achieved. explain that by reducing the supply of labor, âsaid Conrad DeQuadros, senior advisor at Brean Capital in New York.
The state’s initial jobless claims totaled 444,000 seasonally adjusted people for the week ended May 15, up from 478,000 the week before, the US Department of Labor said Thursday. It was the lowest since mid-March 2020 and claims were below 500,000 for two consecutive weeks.
Economists polled by the Reuters news agency had forecast 450,000 candidates for the last week. Unemployment claims remain well above the 200,000 to 250,000 range, considered compatible with healthy labor market conditions. Claims fell from a record 6.149 million in early April 2020.
Claims are expected to decline further in the coming weeks after Republican governors of at least 21 states announced they would withdraw from federally-funded unemployment programs next month. These included a weekly grant of $ 300, and companies say this encourages the unemployed to stay home instead of looking for work.
From manufacturing to restaurants and bars, employers scramble to find workers, even as nearly 10 million Americans are officially unemployed. Improved unemployment benefits provide more than most minimum wage jobs, which range from $ 7.25 an hour to $ 15.
With more than a third of the population vaccinated against the coronavirus, restrictions on companies in the service sector are lifted, allowing for broader economic re-engagement. The economy is also supported by nearly $ 6 trillion in pandemic relief provided by the government over the past year.
US stocks opened higher. The dollar was trading lower against a basket of currencies. US Treasury prices have gone up.
Lack of child care facilities, with most schools offering partial in-person learning, along with lingering fears of COVID-19 and pandemic-related retirements are also believed to be contributing to the labor shortage, which has slowed down hiring in April. Government-funded benefits expire in early September and school districts are expected to resume in-person classes in the fall, which economists say will boost the labor pool.
The minutes of the US Federal Reserve’s April 27-28 policy meeting, released Wednesday, acknowledged reports of companies “struggling to hire workers.” They noted that some of the factors driving the labor shortage “were seen as likely to remain important as risks from the pandemic persisted.”
In a separate report Thursday, the Philadelphia Fed said its economic activity index fell to 31.5 this month from 50.2 in April. A reading above zero indicates growth in manufacturing in the Mid-Atlantic region.
A measure of new orders received by factories rose at a slower pace in May compared to April, as did shipments. But backlogs of unfinished work continued to accumulate, reflecting the shortage of inputs. The survey’s factory employment indicator fell to 19.3 from 30.8 in April. The average work week index jumped six points to 35.5.
Data on claims last week included the period in which the government investigated business establishments for the non-farm payroll component of the May jobs report. The economy created 266,000 jobs in April after adding 770,000 in March.
To get a better idea of ââhow hiring went in May, economists will wait for data next week on how many people continue to receive benefits after a first week of help. Alleged continuing complaints are reported with a one week lag.
Continuing claims increased from 111,000 to 3.751 million during the week ended May 8. About 16 million people were receiving unemployment benefits under all programs on May 1.
âThe overall trend in labor market conditions remains positive, although it’s unclear how this will translate quantitatively into next month’s employment data,â said Lou Crandall, chief economist at Wrightson ICAP in Jersey City.