U.S. states posted a surprise increase in initial jobless claims last week, rising further above a pandemic-era low from earlier this month.
The Labor Department released its weekly jobless claims report on Thursday at 8:30 a.m. ET. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:
Initial unemployment claims, week ended September 18: 351,000 vs. 320,000 expected and a revised 335,000 during the prior week
Continuing claims, week ended September 11: 2.845 million vs. 2.600 million expected and a revised 2.714 million during the prior week
Despite the increase last week, new claims have come down significantly since the start of the year to close in on their weekly rate from before the pandemic. And even with last week's increase in claims, the four-week moving average for filings came down by 750 to reach 335,750.
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.
And as of data from September 4, the total number of claimants across all programs was just under 11.3 million. This dropped by nearly 900,000 compared to the prior week, and compared to 26.6 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.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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