It's Jobless Thursday

It looks like all those claims of a labor shortage are spooking employers, who are finding that the difficulties and the costs of replacing employees a deterrent to layoffs, because initial claims fell significantly last week:

Filings for jobless benefits last week fell and reached a pandemic low, extending a downward trend as demand for labor remains high and employers hold onto workers despite the Delta variant of Covid-19.

Initial unemployment claims, a proxy for layoffs, moved lower in the week ended Sept. 4 to 310,000 from a slightly upwardly revised 345,000 the prior week, the Labor Department reported Thursday. The four-week moving average, which smooths out weekly volatility in the data, fell to 339,500, also a pandemic low.

In the before times, 310K with a 339.5K 4-week average is just a crappy jobs report.

We are no longer getting apocalyptic numbers.

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While claims are down sharply from levels earlier this year, they remain nearly 100,000 above their pre-pandemic trend. Weekly claims averaged 218,000 in 2019. More broadly, the economy had roughly 5.3 million fewer jobs in August compared with the pandemic’s onset in February 2020.

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Employers nationwide have reported difficulty in filling job openings, which have leveled off at records, while millions of Americans remain unemployed.

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“I think you have employers holding on to the workers that they have, given that they know how hard it is to go out there and hire right now,” Ms. House said. “If you’re playing the long game and you know how long it takes to hire workers, then you likely wait this one out,” she added.

Sept. 6 marked the expiration of enhanced unemployment benefits for many Americans, such as a $300 weekly supplement to regular state benefits that was included in government pandemic aid. About half of U.S. states had opted to end their participation earlier this summer.

States that ended the programs early have so far seen about the same rate of job growth as those that didn’t. Americans filed roughly 11.9 million ongoing claims for unemployment benefits through all programs, including two special pandemic programs, during the week ended Aug. 21, the most recent data available.

Any substantial impact from the termination of the special pandemic programs isn’t likely to show up in the claims data for several weeks, economists said. The Labor and Treasury departments have said states can turn to $350 billion in funds allocated to them from a Covid-19 aid package to continue providing additional unemployment assistance to workers. So far, states aren’t taking the Biden administration up on the extension option, Oxford Economics said in a client note Thursday.

We'll see were we go from here.