The US labor market is advancing as weekly demands for unemployment fall and layoffs reach 24-year lows

WASHINGTON, Sept. 2 (Reuters) – The number of Americans filing new claims for unemployment benefits fell last week, while layoffs fell to their lowest level in more than 24 years in August, which suggests that the labor market was advancing even as a new COVID-19. increased infections.

The Department of Labor’s weekly unemployment claims report, the most timely data on the health of the economy, also showed that the number of people with state unemployment rolls is falling to a minimum of 17 months the third week of August.

The decline in layoffs should help ease concerns about the economy, even if on Friday, the August-monitored employment report shows a slowdown in non-farm payroll growth.

“Regardless of tomorrow’s report, keep in mind that weekly unemployment figures say labor market snails continue to harden,” said Chris Rupkey, chief economist at FWDBONDS in New York. “There is no sign that the Delta variant will lead to the loss of jobs across the country.”

Initial demands for state unemployment benefits fell 14,000 to 340,000 seasonally adjusted during the week ended August 28, the lowest level since mid-March 2020, when mandatory closures of non-essential businesses were implemented for curb the first wave of coronavirus cases.

There have been notable declines in applications in California, Illinois and Virginia, while Ohio and Missouri reported large increases. Economists surveyed by Reuters had forecast 345,000 requests for the past week.

Demands have fallen from a record 6.14 billion in early April 2020. However, they remain above the range of 200,000-250,000 considered consistent with healthy labor market conditions.

The latest wave of COVID-19 cases, driven by the Delta variant of the coronavirus, and the acute shortage of workers, have left some economists expecting moderate job gains in August. Last month’s labor market indicators were mixed, with a measure of factory employment and private payrolls exceeding expectations. But hiring by small businesses accelerated and consumer views on the job market remained fairly optimistic. Read more

Wall Street stocks traded higher, with an S&P 500 (.SPX) index hitting the record. The dollar fell against a basket of currencies. US Treasury prices were mixed.

WORKING SCALE

While last week’s claims data does not affect the August employment report as it falls outside the survey period, applications declined last month. The claims report showed the number of people who continued to receive benefits after the first week of aid plummeted between 160,000 and 2,748 million in the week ended August 21, the lowest level since mid-March 2020.

According to a Reuters poll of economists, non-farm payrolls probably rose by 750,000 jobs last month after rising by 943,000 in July.

“We expect the jobs report to show that the economy continued to add jobs at a rapid pace in August, challenging outbreaks of COVID-19 Delta variants across the country,” Julia Pollak said. , chief economist at ZipRecruiter.

This optimism was underscored by a separate report Thursday from global travel firm Challenger, Gray & Christmas showing that job cuts announced by U.S. employers fell 17% to 15,723 in August, the figure lowest since June 1997. So far this year, employers have announced 247,326 job cuts, 87% less than the same period last year.

The pandemic has increased labor market dynamics, creating a shortage of workers, even when 8.7 million people are officially unemployed. At the end of June there was a record 10.1 million jobs. Lack of affordable child care, fears of contracting coronavirus, generous federal-funded unemployment benefits, as well as pandemic-related retirements and career changes have all been blamed for the disconnect.

The labor crisis is expected to subside from September. Government-funded unemployment benefits expire on September 6 and schools reopen for face-to-face learning.

But high cases of COVID-19 could cause some people to be reluctant to return to the workforce. The claims report showed that approximately 12.2 million people received benefits from all programs in mid-August. That number is expected to drop sharply after the expiration of government programs next Monday, which will affect about 7.5 million people.

About 25 states led by Republican governors ended extended profits a few months ago. These steps did not lead to an increase in hiring, which left some economists warning of expectations of an increase in labor.

“Many states have already completed programs before the federal expiration, but so far we have still seen clear changes related to the purposes of these programs in many of the different variables we have studied,” said Daniel Silver, JPMorgan economist in New York.

The recovery of the labor market is gaining strength despite the slowdown in economic activity caused by the latest wave of coronavirus, declining fiscal stimulus and supply constraints. As a result of the expiration of extended benefits, weekly unemployment checks for nearly 3.0 million people will be reduced by $ 300, which economists say will hurt consumer spending.

But growth moderation is likely to be mitigated by declining trade deficits. The trade gap narrowed 4.3% to $ 70.1 billion in July, the Commerce Department said in a separate report Thursday.

Economists have drastically marked their estimates of gross domestic product for the third quarter to an annualized low of 2.9% to 9%. The economy grew at a rate of 6.6% in the second quarter.

“The slowdown is not broad and primarily reflects the return on stimulus spending and ongoing supply problems,” said Ellen Zentner, Morgan Stanley’s U.S. economist in New York.

Report by Lucia Mutikani; Edited by Chizu Nomiyama, Paul Simao and Andrea Ricci

Our standards: the principles of trust of Thomson Reuters.