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Unemployment Claims fall with US Economy Recovering

As the labor market continues to rebound, the number of Americans filing new Unemployment claims fell near to pre-pandemic levels last week, though a labor shortage remains an impediment to faster job growth. The Labor Department’s weekly Unemployment claims report, the most up-to-date data on the economy’s health, showed jobless benefits rolls falling to a 20-month low in early November. The economy is picking up steam after a halt over the summer when a wave of COVID-19 infections caused by the Delta variety wreaked havoc across the country.

For the week ending Nov. 13, initial claims for state Unemployment¬†benefits fell 1,000 to a seasonally adjusted 268,000. That was the lowest level in the United States since the coronavirus pandemic began more than 20 months ago. Reuters polled economists, who predicted 260,000 applications in the most recent week. However, the government’s algorithm for removing seasonal swings from data was less lenient last week, resulting in a smaller drop.

The number of unadjusted claims fell by 18,183 to 238,850. Kentucky was the most significant drop, owing to auto employees returning to plants after being laid off temporarily as automakers deal with a global chip shortage. There were also substantial drops in Michigan, Tennessee, and Ohio, all of which have a considerable auto manufacturing base. A spike compensated for the decreases in California filings.

Claims fell for the sixth week in a row, leaving them just above the 256,000 level seen in mid-March 2020 and within the range consistent with a strong job market. Claims have decreased from a high of 6.149 million in early April 2020, which was a record high. Other data released on Thursday by the Philadelphia Federal Reserve showed an increase in manufacturing activity in the mid-Atlantic area this month, echoing the improved economic tone.

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