Jobless Claims Finally Show Downward Trend, Employers Holding Onto Employees
Jobless claims came in below expected, with the advance figure for seasonally adjusted claims at 310,000, a decrease of 35,000 from the previous week’s level the Department of Labor stated in its newest release. This is the lowest level for initial jobless claims since March 14, 2020 when the level was 256,000 and the full effects of the pandemic had not yet taken their toll on the economy.
The four-week moving average for those who were claiming unemployment insurance was 339,500, a decrease of 16,750 from the previous week’s revised average. The DOL adds that this is once again the lowest level for this average since March 14, 2020 when it was 225,000.
Initial unemployment claims are considered a proxy for layoffs, meaning the decrease in claims suggests that employers are retaining their employees. Claims have started trending lower since mid-July, and coupled with a disappointing jobs report in August, the falloff in weekly jobless claims likely points to employers finally being able to hold onto their workers.
Despite this, economist for Indeed AnnElizabeth Konkel told the Wall Street Journal that the rise in COVID-19 cases from the Delta variant could still show up in the jobless claim data in the near future. “We’re still at the mercy of the pandemic,” she said.
This comes on the heels of a historically tight labor market in the U.S., where employers have supplied a larger number of job openings than there are willing workers to fill them. This could also be contributing to the falloff in jobless claims as employers are retaining employees they would otherwise either lay off or pay less resulting in an increase of those claims.
The WSJ adds that states that have needed the programs early have so far seen about the same rate of job growth as those that didn’t. There were about 11.9 million ongoing claims for unemployment benefits, including special pandemic benefits, during the week that ended August 21.
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