The number of new applications for unemployment benefits fell 35,000 last week to 310,000, the Labor Department reported on Thursday.
The claims hit their lowest level since the start of the pandemic, even as the delta variant sweeps through the country. Thursday’s jobless claims number was less than forecasters’ expectations of 335,000.
The Thursday report was being closely watched by economists to see what impact the nationwide cessation of expanded federal unemployment benefits may be having on new applications for unemployment.
JOB OPENINGS HIT RECORD 10.9 MILLION AMID LABOR SHORTAGE FEARS
“With another significant move lower, new jobless claims have reached a fresh pandemic era low, seemingly on the verge of finally pushing below the 300,000 level,” said Mark Hamrick, Bankrate’s senior economic analyst. “The decline of 35,000 from the previous week’s upwardly revised level puts them at 310,000. They were in the low-to-mid 200,000 range before the pandemic.”
The numbers reflect the last week that many were permitted to receive $300 supplemental payments to their state unemployment insurance, one of the expanded federal programs that was ended on Labor Day. The GOP and some economists contend that labor shortages have been caused by the supercharged benefits, although others say the impact has been marginal.
The report comes a day after the July JOLTS, or Job Openings and Labor Turnover Survey, was released by the Bureau of Labor Statistics. The Wednesday report was a record, with the number of job openings increasing by 10.9 million, nearly a million openings above consensus forecasts.
Last week the much-anticipated August jobs report was released, and it fell well short of what economists were hoping for. The economy added just 235,000 new jobs last month, far below the 750,000 that were expected. Despite the meager gains, the overall unemployment rate dropped slightly from 5.4% to 5.2%.
The August jobs numbers have added to the anxiety surrounding the nation’s economic recovery following last year’s two-month pandemic-induced recession. While new jobs have consistently been added since the start of the year, the pace slowed in August, given that more than 1 million new jobs were added the month before and 962,000 in June.
Millions are still unemployed compared to before the pandemic when the country’s unemployment rate dropped to 3.5%, the lowest level in decades.
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Meanwhile, the Federal Reserve is closely watching the unemployment rate and inflation, which has been running hotter than the central bank and many economists had predicted. Current inflation is well above the Fed’s 2% target, although it expects it to settle down in the coming months.
Fed officials have said they don’t intend to raise interest rates until the country also reaches not only its inflation target but also full employment.
