U.S. states likely posted a modest drop in initial unemployment claims last week, bringing the number of those newly unemployed each week back toward their pre-virus pace.
The Labor Department is set to release its jobless claims report Thursday morning. Here are the main metrics expected from the print, compared to consensus estimates compiled by Bloomberg:
Initial unemployment claims, week ended October 9: 320,000 expected, 326,000 during prior week
Continuing claims, week ended October 2: 2.670 million expected, 2.714 million during prior week
New weekly jobless claims having been inching closer to their pre-pandemic levels over the past several months, reflecting a slowdown in firings, layoffs and separations as reopenings took place and demand for workers resurged. At the beginning of September, initial filings came in at 312,000, or the lowest since March 2020. However, this represented a level still about 100,000 greater than the average weekly pace from before the virus in 2019.
Though the underlying trend in new jobless claims has been falling, some choppiness has returned to the data in recent weeks. Some economists attributed this to temporary disruptions around Hurricane Ida, which delayed many individuals from filing new claims until mid-September. The four-week moving average for new jobless claims — which smooths out volatility in the weekly data — increased by nearly 4,000 last week to reach 344,000. The prior week’s moving average was also upwardly revised.
Continuing claims did come in at a fresh pandemic-era low in last week’s report, however. These claims, which capture those still collecting benefits from regular state unemployment programs, dropped to 2.714 million at beginning of October. By comparison, continuing claims had averaged 1.699 million throughout 2019.
Lingering concerns over the coronavirus have kept a lid on further progress in the labor market’s recovery, with many individuals still remaining on the sidelines of the labor force. Demand for workers has far outpaced supply, and job openings were at a near-record high of more than 10.4 million in August, Labor Department data earlier this week showed.
“Shortages are a severe constraint for the labor market currently,” Rubeela Farooqi, chief U.S. economist for High Frequency Economics, wrote in a note published Tuesday. “Overall, the labor market remains on a gradual path towards pre-pandemic health. However, the slowdown in the pace of job gains and still-depressed participation rates are reminders that the process will likely take some time.”
The labor force participation rate in September was at just 61.6%, recovering from a pandemic-era low of 60.2% but still holding 1.7 percentage points below its level from February 2020.
“We’re getting more concerned that much of the drop in labor force participation will prove permanent, which is in turn a reason to expect the recovery in real activity and employment to disappoint over the coming years, while wage and price growth remain elevated,” Michael Pierce, senior U.S. economist for Capital Economics, wrote in a note on Wednesday.
This post will be updated with the Labor Department’s weekly jobless claims report Thursday morning at 8:30 a.m. ET. Check back for updates.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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