Jobless claims preview: Another 320,000 individuals likely filed new claims last week
U.S. states are expected to post a drop in initial jobless claims last week, as the pace of those rendered newly unemployed slowed further and demand for workers remained elevated.
The Labor Department is set to release its weekly jobless claims report on Thursday at 8:30 a.m. ET. Here are the main metrics expected from the print, compared to consensus estimates compiled by Bloomberg:
Initial unemployment claims, week ended September 18: 320,000 expected versus 332,000 during the prior week
Continuing claims, week ended September 11: 2.600 million expected versus 2.665 million during the prior week
New claims have closed in on their weekly rate from before the pandemic. At the start of the month, new jobless claims dipped to 312,000, or their lowest level since March 2020, before ticking back up. Claims had come in at an average weekly pace of just over 200,000 per month throughout 2019.
Over the past several months, as more individuals became vaccinated and returned to going out, the main issue capping the labor market's recovery has been on finding enough workers to meet employers' soaring demand. Job openings were at a record high of 10.9 million as of the end of July, highlighting the widespread nature of the labor constraints.
A growing list of companies have highlighted the operating disruptions and cost pressures resulting from labor scarcities. Earlier this week, shipping giant FedEx (FDX) said its first-quarter results "were negatively affected by an estimated $450 million year-over-year increase in costs due to a constrained labor market which impacted labor availability, resulting in network inefficiencies, higher wage rates, and increased purchased transportation expenses."
And as long as concerns over the coronavirus linger, headwinds to the labor market's full recovery are unlikely to entirely abate.
"Although supply constraints are expected to ease over coming months, the labor market still faces headwinds from the virus, especially if it continues to disrupt school reopenings and business activity," Rubeela Farooqi, chief economist for High Frequency Economics, wrote in a note earlier this week. "That could have implications for labor supply and demand going forward, which in turn will impact the timing of a complete recovery in the labor market."
Encouragingly, however, the number of individuals claiming unemployment benefits over a protracted period of time has continued to come down.
Continuing claims for regular state programs fell to the lowest level since March 2020 last week, coming in at just under 2.7 million.
And as of the latest data from Aug. 28, the total number of claimants across all programs was just over 12.1 million, compared to 30.3 million during the same week last year. And given that the data is on a multi-week delay, that sum has not yet captured the massive drop in claimants across all programs taking place after Sept. 6, when federal pandemic-era unemployment benefits previously authorized by Congress expired across all states. Individuals collecting benefits via these federal programs had comprised nearly three-quarters of the all claimants as of late August.
This post will be updated with the results of the Labor Department's weekly jobless claims report Thursday morning at 8:30 a.m. ET. Check back for updates.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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