The number of Americans newly seeking jobless benefits dropped more than expected to a new pandemic-era low last week as workers quit their jobs in record numbers amid a historically tight labor market, the feds said Thursday.
Still, economists say the labor market has a long way to go before reaching normalcy after national reads on employment for the last two months showed less-than-expected gains in new jobs.
As of last week, initial filings for unemployment benefits, seen as a proxy for layoffs, fell to 293,000, down 36,000 from the prior week’s level of 329,000, according to data released Thursday by the Labor Department.
Thursday’s drop in claims comes days after a separate report from the feds showed American workers are quitting at record rates.
A whopping 4.3 million people quit their jobs in August, the most recent data available, the highest number of monthly resignations dating back to when the feds began collecting the data in December 2000 — and 300,000 more than in July, according to the Labor Department report.
That number was driven by a surge in resignations across the restaurants, bars and hotels industry.
Workers who quit — unlike those who are laid off — aren’t eligible for unemployment benefits, and thus aren’t counted among the weekly new claimants.
Weekly new claims have fallen substantially from the 2020 peak of about 6.1 million new claims in a single week, but remain above the 200,000 new claims per week seen before the pandemic.
Continuing claims fell by 134,000 from the prior week’s revised level, according to the new data. That figure stood at nearly 13 million at the same time last year, in the thick of the pandemic.
For latest reading, economists surveyed by Dow Jones expected new claims to fall to 318,000 after seeing a drop of 38,000 last week.
Almost 2.6 million Americans remained on traditional state unemployment benefits as of Thursday, the feds added.
The weekly report comes after the September jobs report came in way lower than economists expected, adding just 194,000 jobs for the month.
September’s numbers fell far short of economists’ expectations of 500,000 jobs added, and comes after the country added a disappointing 366,000 jobs in August.
The two consecutive disappointing reports indicated that the labor recovery will likely take longer and be bumpier than expected, economists said.
Labor Secretary Marty Walsh acknowledged that it was “not the best number” but blamed the poor state of the economy solely on the pandemic, saying that the flare up in cases drove people back home.
“There’s no question that we have work to do. Number one, we’re still living with a pandemic, it’s a worldwide pandemic,” Walsh said on “Axios on HBO” Sunday evening.
“Also, people concerned about the Delta variant, people concerned about their personal health. We have folks that are vaccinated, folks that aren’t vaccinated, people who are vaccinated worried about the people that aren’t vaccinated,” he continued.