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U.S. weekly jobless claims drop to 19-month low -Breaking

© Reuters. FILEPHOTO: A line forms outside of the newly opened career center in Louisville for appointments in person, U.S.A. April 15, 2021. REUTERS/Amira Kazoud

WASHINGTON (Reuters] – Last week saw a decline in Americans filing claims for unemployment benefits. It is pointing towards a tightening labor marketplace, although a shortfall of workers might keep October’s pace of job growth moderate.

According to the Labor Department, initial claims for unemployment benefits decreased by 6,000 to an adjusted seasonally adjusted 290,000. For the week that ended on Oct. 16, it was reported. This was the lowest level of claims since March 2020 when the country was still in the early stages of the COVID-19 epidemic. This was also the 2nd consecutive week of claims that were below 300,000. Employers are holding on to their workers in an effort to avert a labor shortage.

Reuters polled economists and forecast 300,000. The number of claims has fallen from 6.149million in April 2020, a record. This is consistent with a healthy labour market. Claims ranges from 250,000 to 300,000.

This pandemic caused a disruption in the labor market, with 10.4 million jobs available as of August’s end. However, 7.7 million were unemployed as of September. The disconnect can be attributed to a variety of reasons, such as a lack of childcare and generous federal unemployment benefits.

Although in-person education has resumed in schools and extended unemployment benefits have ended, last month’s labor market was flat. The labor force participation rate is the percentage of Americans working age who are employed or looking for a job has fallen to 183,000, which means that about 183,000 Americans dropped out.

“We remain skeptical about the ending of extended unemployment benefits leading to a substantial return to the labour force in the short-term,” stated Veronica Clark, an economist. Citigroup New York (NYSE:).

This data included the claims period in which employers were surveyed by the government for nonfarm payrolls. There was a drop in claims between September and October survey weeks. This suggests that there has been an uptake in employment growth.

The pandemic has caused a lot of upheaval in the economy, so claims data is not a reliable indicator for employment growth. All industries are experiencing labor shortages. They are creating congestion in ports, reducing production at factories and leaving shelves empty. This is also fuelling inflation.

Federal Reserve’s Beige Book, anecdotal information from national contacts on business activity that was published on Wednesday, confirmed the paucity in workers. The report, which included anecdotal evidence on labor market trends, showed that employment increased “at a modest-moderate rate” over recent weeks. However, there was little to no supply.

The September nonfarm payrolls rose by only 194,000 jobs, which is the lowest in nine months. The peak employment in February 2020 was 5.0 million.

After accelerating at 6.7% rate during the April-June period, economists have predicted that the gross domestic expansion will slow down to 0.5% per year in the third trimester.

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Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.