Jobless claims sink to new pandemic low
The number of Americans applying for first-time weekly unemployment benefits last week fell to its lowest level since the COVID-19 pandemic erupted in early 2020.
Workers filed 269,000 jobless claims, down from 283,000 the previous week, according to the Department of Labor. Before the pandemic, weekly claims averaged less than 250,000. The number of workers filing continuing claims fell to 2.1 million, also a post-pandemic low. During the week ending October 16, nearly 511,000 people filed for pandemic-related unemployment assistance.
"We expect both types of claims to continue to gradually decline as the labor market continues to heal," Nancy Vanden Houten, lead economist with Oxford Economics, told investors in a research note.
Vaccine mandates contributing to layoffs
Nearly 5,100 workers were laid off in October because they refused to comply with an employer's requirement to get vaccinated against COVID-19, according to Challenger, Gray & Christmas. That compares with 5,800 who lost their jobs because of businesses closing.
"We know companies are holding tight to their workers and are in fact looking for workers," said Andrew Challenger, senior vice president with the outplacement firm," in a report. "However, we also know that for many employers, a federal vaccine mandate from OSHA is forthcoming, and for many government employees and contractors, as well as for health care providers, mandates already exist."
Jobless claims have steadily declined in recent months despite economic headwinds, including rising inflation, weaker consumer spending, supply and worker shortages, and the ongoing impact of the coronavirus. Economic growth slowed to a disappointing 2% annual rate between July and September. That marked the weakest quarterly growth since the recovery from the pandemic recession began last year.
Job growth to shrug off Delta variant?
The Labor Department is scheduled to release its latest employment report on Friday, offering a fuller picture of the job market. Data showed that hiring across the U.S. weakened in August and September as the COVID-19 Delta variant spread, although the nation's unemployment rate fell to 4.8% as some people found work and others stopped looking for a job.
"Businesses are likely averse to laying off workers given they continue to face labor shortages," Rubeela Farooqi, chief U.S. economist with High Frequency Economics, said in a research note. "The October payrolls report will shed light on whether supply eased on diminishing constraints or if the labor market continues to face headwinds."
A record 4.3 million Americans quit their jobs in August alone, with many citing burnout. But many Americans have used the massive economic shock caused by the virus to launch new ventures. A record number of applications for new businesses were submitted between the second half of 2020 and May 2021, according to a recent report from the National Bureau of Economic Research.
