Jobless claims drop to a fresh pandemic low

Skill mismatch in US explains why many open jobs aren’t filled: Former Chase economist

Former Chase chief economist Anthony Chan provides insights into inflation, unemployment and the worker shortage. 

The number of Americans filing for unemployment benefits dropped to a new pandemic low last week, dipping below 300,000 for the first time since March 2020. 

Figures released Thursday by the Labor Department show that applications for the week ended Oct. 9 fell to 293,000 from a revised 344,750 a week earlier. It marked the best level of jobless claims since March 14, 2020, when there were 256,000 applicants just as COVID-19 began to shut down the nation's economy. 

Continuing claims, or the number of Americans who are consecutively receiving unemployment aid, fell to 2.59 million, a decrease of 134,000 from the previous week. It marked another pandemic low. The report shows that roughly 3.6 million Americans were collecting jobless benefits for the week ending Sept. 25; by comparison, exactly one year ago, an estimated 24.9 million Americans were receiving benefits. 

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"Now we’re talking," said Robert Frick, corporate economist at Navy Federal Credit Union. "A big drop in unemployment claims for the most recent week finally cracked the 300,000 barrier and is the strongest evidence yet that the COVID-19 delta wave has lost its influence on layoffs." 

Claims have continually declined as the economy recovers from the pandemic and Americans venture out to travel, shop and eat. Businesses have struggled to keep up with the demand, however, and have reported difficulties in onboarding new employees. Thursday's report suggests that companies are making an effort to retain the workers they already have.

The Labor Department reported last week that there were 10.4 million open jobs at the end of August. Though a slight decline from the end of July, it's still a staggeringly high figure; there are about 2.7 million more open jobs than unemployed Americans looking for work.

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The number was exacerbated by a record 4.3 million people who quit their jobs in August, representing about 2.9% of the country's workforce, according to the Job Openings and Labor Turnover Survey (JOLTS) report. The report was released just a few days after the government's September jobs report, which revealed payroll increased by just 194,000 last month, well below the 500,000 expected by Refinitiv economists. 

But economists think the latest unemployment report is a sign the labor market is getting back on track after a summer dominated by the spread of the highly contagious delta variant.

"We’re now in the period when the government collects data for the forthcoming October jobs report, due in early November," said Mark Hamrick, Bankrate's senior economist analyst. "There’s some reason to believe the payrolls data may look better next time around."

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