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The latest update on the labor market is scheduled to arrive Thursday morning when the government releases its weekly report on jobless claims.
Analysts surveyed by Bloomberg expect that the number of new claims filed will fall slightly from the previous week.
Last week, the Labor Department reported that 505,000 workers filed first-time claims for state benefits in the week that ended May 1. An additional 101,000 new claims were filed for Pandemic Unemployment Assistance, a federal program covering freelancers, part-timers and others who do not routinely qualify for state benefits. Neither figure is seasonally adjusted.
The labor market is struggling to return to normal after more than a year of being whipsawed by the pandemic. Restrictions are lifting, businesses are reopening and job listings are on the upswing. Hiring increased in April but at a slower pace than anticipated.
Whatever Thursday’s report brings, it is sure to fuel the debate over the impact that jobless benefits are playing in the economy’s recovery.
Some employers, particularly in the restaurant and hospitality sectors, have complained of having trouble finding workers. The U.S. Chamber of Commerce and several Republican governors have asserted that a temporary $300-a-week federal unemployment supplement has made workers reluctant to return to the job.
The U.S. Labor Department said that as of Wednesday, six states — Iowa, Mississippi, Missouri, Montana, North Dakota and South Carolina — had notified the department that they were terminating federal pandemic-related unemployment benefits next month.
The unemployment rates in those states in March, the latest month for which data is available, ranged from 3.7 percent in Iowa to 6.3 percent in Mississippi.
But economists are skeptical that jobless benefits are playing anything more than a bit part in the pace of the job market’s recovery.
“There is tremendous churn in this labor market,” said Gregory Daco, chief U.S. economist at Oxford Economics. “There are still major supply constraints, and unemployment benefits are not the most important one. The virus is.”
Prematurely halting benefits is “detrimental to the economy,” Mr. Daco said. “You’re voluntarily hurting certain vulnerable tranches of the population.”
Many workers have children at home who are not attending school in person. Others are wary of returning to jobs that require face-to-face encounters. Covid-19 infections have decreased since September but there are still 38,000 new cases being reported each day and 600 Covid-related deaths. Less than half the population is fully vaccinated.
There is halting progress from employers as well, as businesses continually update their assessment of costs and customer demand. They are wary of locking themselves in to hiring more workers or raising pay when there is so much uncertainty swirling.
Nationwide, the unemployment rate was 6.1 percent, and there are 8.2 million fewer jobs than in February 2020.
Source: The NY Times
Keyword: Unemployment claims report will shed new light on the economy.