Jobless claims fell below 300,000 last week for the first time since the pandemic began. Seasonally adjusted claims came in at 293,000, a decrease of 36,000 from the previous week’s level. According to the Department of Labor, this is the lowest level for initial claims since March 14, 2020 when it was 256,000.
The Dow Jones estimate for claims was 318,000, CNBC reported. Larger than expected declines signal a possible road to recovery for a labor market that has had volatile swings throughout the past year.
Interestingly, California contributed to the largest decrease in jobless claims, with a decrease of 14,733. In recent preceding weeks, the state had accounted for some of the largest contributions to the overall jobless claims total, but seems to have finally turned a corner. California is on its third round of state stimulus payments, making it the only state nationwide to provide stimulus payments to its own citizens so far.
The largest increases in claims last week came from Pennsylvania with 1,707. Michigan, Missouri and Texas all offset this number with significant drop-offs in the amount of jobless claims from their states.
Another positive indicator, the four week moving average dropped to 334,250. This represents a 10,500 decline that has also marked the lowest number since March 14, 2020 according to the Department of Labor. The four-week moving average is a commonly used marker for volatility, and the decrease suggests a downward trend.
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The news comes amid conflicted employment reports and persistent upward price pressures. Unemployment is still above pre-pandemic levels, despite business owners claiming they are having difficulty filling positions. Household employment is still 5 million lower than what it was before the pandemic. This week’s drop in claims is welcome, but with high unemployment and high inflation, calling economic liftoff is still premature.
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Last updated: October 14, 2021