U.S. Unemployment Claims Declined to 326,000

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Weekly Jobless Claims, unemployment

The Labor Department reported on Thursday, the number of Americans filing first-time claims for jobless claims declined to 326,000 last week.

The number was below anticipations of 350,000 and compared with a revised 364,000 in the prior week.

The four-week moving average was 344,000, an increase of 3,500 from the previous week’s revised 340,500.

Unemployment claims have bounced around in recent weeks as the delta variant of the Covid-19 has forced businesses to impose restrictions to reduce the spread of the deadly virus. 

The reading is the second of three this week to gauge the health of the labor market. Earlier this week, ADP announced that employers it surveyed had created 568,000 new jobs, beating expectations. 

The Labor Department is likely to bring the official government measure of monthly job growth on Friday. Analysts estimates call for around 500,000 jobs to be created following August’s disappointing 235,000 jobs.

A chief investment officer for Commonwealth Financial Network, Brad McMillan, announced that he expected the job number to come in as anticipated, somewhere between 500,000 and 600,000.

Improving the Covid-19 situation might encourage more individuals back into the labor market

Moreover, firms continue to report difficulty filling the over 11 million jobs open. 

Significantly, an index of staffing demand from the American Staffing Association, representing temporary hiring firms, hit its highest level since December 2018. Staffing jobs gained 26.7% compared with the same week a year ago. Besides, 55% of staffing firms reporting a surge in temporary/contract employment.

Richard Wahlquist, president and CEO of the association announced that there are no clues the labor supply is loosening. He added the main issue is the shortage of available talent across the spectrum.

Various factors have led to the imbalance between supply and demand, including a strong economy, concerns over coronavirus, lack of child care for jobseekers, and demographic changes.

Most analysts don’t expect the situation to improve until the next year or later. As more people get vaccinated against coronavirus, and the delta strain fades as a health threat.

Improving the Covid-19 situation and the reopening of schools should encourage more individuals back into the labor market over the coming quarters.

A rapid rise in wages was likely to slow as more individuals in lower-paying industries returned to work. Those were the kinds of businesses that suffered the most significant job losses during the Covid-19 pandemic.

Yet wages are still going up, and they could grow again in September. Average hourly pay increased 4.3% in the 12 months ended in August.

Higher wages reflect the willingness of firms to pay more at a time when labor is scarce. But if they keep growing, it’s likely to feed into a broader U.S. trend of higher inflation.

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