U.S. weekly jobless claims drop to 310,00 near 18-month low

The number of new filings for jobless claims dropped to 310,000 last week, the lowest in nearly 18 months, indicating a step towards the pre-pandemic normal for job growth that was being hindered by labor shortages.

The Labor Department on Thursday reported the total number for the week ended September 4. It is a substantial drop from the previous week’s revised claim total of 345,000.

However, economists surveyed by Dow Jones expected the claims to total 335,000.

The rate within the 200,000-250,000 range is viewed as consistent with healthy labor market conditions.

Before the pandemic, in March 2020, the initial filings had been trending around 215,000. At its peak, the filings claim hit 6.1 million in early April of the last year.

The worries around the employment picture have escalated in recent weeks after the Labor Department reported that nonfarm payrolls increased 235,000 in August, after surging 1.053 million in July. The growth fell short of Wall Street’s expectation of 720,000.

The growth in some market areas has slowed amid rising fears over the Delta variant of the coronavirus.

“With Delta cases appearing close to a peak in the United States, we expect hiring to pick back up in September, although the pace of job growth is unlikely to return to the robust pace of early summer,” Sarah House, a senior economist at Wells Fargo in Charlotte, North Carolina, told Reuters.

The recent report showed the number of people continuing to receive benefits dropped to 2.78 million, a decrease of 22,000 from the previous week, the lowest level since March 14, 2020.

Total recipients under all unemployment programs declined to 11.93 million, a drop of 255,757 as the extended federal benefits expire this month.

The number of available jobs totaled 10.9 million at the end of July, jumped 7.4% from the month earlier, the Labor Department said in another report.

On Wednesday, the Federal Reserve said job creation around the country “ranged from slight to strong” from July through August.

The central bank, in its periodic Beige Book report, noted that there is an “extensive” shortages of available workers, and said businesses are raising wages to try to fill positions.

The Fed said growth overall “downshifted slightly to a moderate pace” for the period.

Picture Credit: Reuters