US jobless claims held near multi-decade lows last week as companies worked to keep employees on their payrolls amid ongoing labor shortages.
The Labor Department released its latest weekly jobless claims report Thursday at 8:30 am ET. Here were the main metrics from the print compared to consensus estimates compiled by Bloomberg:
Initial jobless claims, weekend April 9: 185,000 vs. 170,000 expected and revised 167,000 during prior week
Continuing claims, weekend April 2: 1.475 million vs. 1.500 million expected, 1.523 million during prior week
While first-time unemployment claims rose slightly more than expected in the latest weekly data, they were still near a 54-year low set earlier this month. Weekly claims fell to the lowest level since 1968 during the prior week at just 167,000. That compares to the average of about 218,000 new claims filed per week throughout 2019 before the pandemic. And the latest figures represent a staggering reversal from the outsized claims filed at the height of the pandemic two years ago, when claims at one point topped 6.1 million in a single week in April 2020.
Given the surge and then decline in jobless claims, the Labor Department has also now reconfigured the way it adjusts the weekly data to account for seasonal factors. Starting last week, the Labor Department returned to using “multiplicative” seasonal adjustment factors for the data. For much of the pandemic, the department had been using “additive” seasonal adjustments that help smooth out large swings in the weekly numbers.
Nevertheless, the underlying trend in the claims data has undeniably pointed to a labor market still short of sufficient worker supply to meet demand. Labor costs have risen for companies across industries as a result, and contributed to a further jump in inflation. The March Consumer Price Index (CPI) released earlier this week showed consumer-level inflation rose 8.5% in March over last year — the fastest annual rate since 1981.
“It seems like we’re in the midst of a perfect storm of factors with rising commodity prices, supply chain issues, and a tight labor market so it is not surprising that inflation is rising at its fastest pace in 40 years,” Brian Price , head of investment management for the Commonwealth Financial Network, said in an email Tuesday.
Other recent economic data have also underscored the dual concerns companies have been facing over labor supply challenges and rising costs. In the National Federation of Independent Business’ latest monthly small business optimism survey released earlier this week, the firm said 31% of surveyed owners reported that inflation was their single-most important business problem, edging out “labor quality” as the top concern. That also marked the highest proportion of firms citing “inflation” as their top problem since 1981.
“Inflation has impacted small businesses throughout the country and is now their most important business problem,” NFIB Chief Economist Bill Dunkelberg NFIB said in the release. “With inflation, an ongoing staffing shortage, and supply chain disruptions, small business owners remain pessimistic about their future business conditions.”
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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