The number of Americans filing new claims for unemployment benefits fell close to pre-pandemic levels last week as the labor market recovery continues, though a shortage of workers remains an obstacle to faster job growth.
The weekly unemployment claims report from the Labor Department on Thursday, the most timely data on the economy’s health, also showed jobless benefits rolls declining to a 20-month low in early November. The economy is regaining momentum following a lull over the summer as a wave of COVID-19 infections driven by the Delta variant battered the nation.
“Demand for labor is very strong and workers are in short supply, so layoffs are very low right now,” said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania.
Initial claims for state unemployment benefits slipped 1,000 to a seasonally adjusted 268,000 for the week ended Nov. 13. That was the lowest level since the start of the coronavirus pandemic in the United States more than 20 months ago.
Economists polled by Reuters had forecast 260,000 applications in the latest week. The smaller decline was because the model that the government uses to strip out seasonal fluctuations from the data was less generous last week.
Unadjusted claims dropped 18,183 to 238,850. The decrease was led by Kentucky, likely due to automobile workers returning to factories after temporary layoffs as motor vehicle manufacturers deal with a global semiconductor shortage. There were also big declines in Michigan, Tennessee and Ohio, states that also have a strong presence of auto manufacturers.
The decreases offset a surge in filings in California.
The seventh straight weekly decline left claims just above the 256,000 level in mid-March 2020, and in a range that is associated with a healthy labor market. Claims have declined from a record high of 6.149 million in early April 2020.
Jobless claims: https://graphics.reuters.com/USA-STOCKS/egpbkaebgvq/joblessclaims.png
The improving economic tone was matched by other data from the Philadelphia Federal Reserve on Thursday showing an acceleration in manufacturing activity in the mid-Atlantic region this month.
Factories in the region that covers eastern Pennsylvania, southern New Jersey and Delaware, reported strong order growth. They were upbeat about business conditions over the next six months and anticipated maintaining a strong pace of capital expenditures in 2022. But labor and raw material shortages persisted, leading to a rapid piling up of unfinished work, even as manufacturers increased hours for workers.
Factories continued to face higher prices for inputs, which they passed on to consumers.
“We look for voracious goods demand and a plethora of unfilled orders to keep factories pumping out goods at a very healthy pace,” said Oren Klachkin, lead U.S. economist at Oxford Economics in New York. “We also expect that businesses will continue to face major supply-chain problems next year, though headwinds should start to ease in the second half of 2022.”
Stocks on Wall Street were lower. The dollar slipped against a basket of currencies. U.S. Treasury yields dipped.
Philly Fed: https://graphics.reuters.com/USA-STOCKS/lgvdwngqepo/phillyfed.png
TIGHT LABOR MARKET
The reports added to a surge in retail sales in October and a sharp rebound in production at factories in suggesting that economic activity accelerated early in the fourth quarter after gross domestic product increased at its slowest pace in more than a year in the July-September period.
Stronger growth could spill over into 2022, with a third report from the Conference Board showing its index of Leading Economic Indicators jumped 0.9% in October after gaining 0.1% in September.
Leading indicators: https://graphics.reuters.com/USA-STOCKS/byvrjknbbve/leadingindicators.png
The labor market is getting tighter. The number of people continuing to receive benefits after an initial week of aid dropped 129,000 to 2.080 million in the week ended Nov. 6, the claims report showed. That was also the lowest level since the mid-March in 2020.
A total 3.185 million people were collecting unemployment checks under all programs during the week ended Oct. 30. Shrinking unemployment rolls raise hopes that more people will return to the labor force soon.
Millions of unemployed Americans remain at home even after the expiration of generous federal government-funded benefits, the reopening of schools for in-person learning and companies raising wages.
The claims data covered the period during which the government surveyed business establishments for the nonfarm payrolls component of November’s employment report.
Claims have dropped since mid-October, which would suggest stronger employment growth this month. But workers are scarce, with 10.4 million job openings as of the end of September.
“There is some uncertainty as a key to monthly job growth is labor supply and the Delta variant,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “The good news is that the Delta variant’s impact on the labor market in November will be less than that seen during the teeth of the recent wave.”
The economy created 531,000 jobs in October. Employment growth has averaged 582,000 jobs per month this year and the labor force is down 3 million from its pre-pandemic level.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
Nobody seems to know what's going on with the economy – CNN
(CNN)If you’re confused by the US economy, which simultaneously shows signs of strength and cause for concern, you’re not alone.
- This is a particularly unusual environment. It is making predictions really difficult for economists. The labor shortage, supply chain crisis, energy crunch, inflation and Covid-19 situations all wrapped into one make for a delicate balancing act. We should cut economists a break.
- Right in the long run. Economists actually have been proven correct over the past several months when they initially were thought to be wrong. That’s because the reports keep getting revised higher in subsequent months as Labor Department economists get more data. It’s not only hard for economists at Goldman Sachs and JPMorgan to figure out — it’s hard for the government, too.
- Don’t focus on expectations. The forecasts aren’t the important thing here — it’s the actual data. And one month doesn’t a trend make. We’ve had some shockingly good jobs data in recent months, and November wasn’t all that bad — just not quite as good as we had expected.
Omicron Variant May Be Good For Economy – Forbes
The omicron variant of Covid-19 has sparked great fear. With time, we may find the fear to have been justified, but we may find the opposite: that this is good news for the economy.
It’s still early days for our knowledge of omicron. Waiting to learn more seems to make sense, but consider this: Business decisions are being made every day. Any person who waits for perfect certainty—about the economy, technology or Covid-19—will never make a single decision. In many areas decisions have to be made this week. So it’s worthwhile to consider how omicron may be good for the economy.
Omicron seems to be displacing the delta variant in South Africa. Ted Wenseleers showed that delta’s share of total Covid-19 cases in South Africa has plummeted while omicron has surged. Because the early indications show that omicron was highly transmissible, it could well displace the delta variant around the world.
So far omicron has triggered a surge in infections in South Africa, but not a comparable increase in deaths. There’s good reason for the virus to mutate to be less dangerous. Bugs that kill their hosts don’t replicate as much as bugs that allow their hosts to remain alive. Many viruses in the past have evolved to be milder. We cannot take this idea too far, however.
The omicron virus may have mutated so that it has greater ability to infect those who already had been exposed to earlier variants. That’s no surprise to South African scientists, who have observed a very high past infection rate in their population. The virus could not get ahead by finding people never exposed to any version of Covid-19, so it found a way to infect the previously ill, this theory goes.
BioNTech CEO Ugur Sahin said recently that current vaccines probably help protect against severe illness from the omicron variant, and that new vaccines are under development that would be more targeted against omicron. Given the speed with which our vaccines were developed, we may have new versions being tested in the lab right now. The question will be how long we have to wait for regulatory approval.
From an economic forecasting viewpoint, business leaders should consider the upside potential of omicron. Although it is way too early to be sure, we may find that the disease becomes dominated by a less dangerous mutation. Illness would continue if this happens, but with fewer deaths and hospitalizations. People would come to feel more comfortable dining out, traveling and seeking routine non-Covid healthcare tests and procedures. The rosy view is far from certain, but current evidence is not more pessimistic.
Companies that that are especially sensitive to the Covid pandemic should try to delay big decisions. We’ll have better information in the coming weeks. But decisions that cannot be delayed should probably consider the possibility of a stronger economy rather than greater Covid problems.
Can the global economy battle through another COVID-19 setback? – Aljazeera.com
Video Duration 26 minutes 00 seconds
A new coronavirus variant has forced governments to impose travel bans just as economies were starting to recover.
Last week, after scientists in South Africa identified a new coronavirus variant, borders were suddenly closed off to passenger travel from Southern African countries, oil prices fell more than 10 percent, and stock markets took a hit.
Markets and economies are expected to face weeks of uncertainty as investors closely watch for updates on Omicron. What comes next largely depends on what scientists discover and how quickly they do so.
Also, green hydrogen has been hailed as the energy of the future; can it help decarbonise economies?
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