U.S. weekly jobless claims returned to levels not seen since the pandemic began in March of 2020.
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That’s according to the weekly U.S. Department of Labor Initial Claims report released on Thursday morning. Initial jobless claims are claims filed by unemployed individuals with the Labor Department after losing their jobs. These claims allow unemployed people to claim unemployment benefits. (See Insiders’ Hot Stocks on TipRanks)
Jobless Claims Drop as Economy Creates More Jobs
Initial Jobless Claims declined to 269,000 in the week ending October 30 of 2021, from a revised 283,000 in the previous week. That means more people are finding jobs, something confirmed by the October ADP Employment report published Wednesday morning.
The ADP report is a monthly survey of private non-farm job creation based on ADP clients’ actual payroll data.
America’s private businesses hired 571,000 workers in October of 2021, up from a revised 568,000 in September. Economists have been looking for 400,000 hires. That’s the utmost improvement in private job gains in four months, driven again by increases in the service sectors.
“The labor market showed renewed momentum last month, with a jump from the third quarter average of 385,000 monthly jobs added, marking nearly 5 million job gains this year,” said Nela Richardson, chief economist, ADP. “Service sector providers led the increase, and the goods sector gains were broad-based, reporting the strongest reading of the year. Large companies fueled the stronger recovery in October, marking the second straight month of impressive growth.”
Job Gains Ease Labor Market Concerns
The two reports ease concerns about labor market frictions, preventing the market’s supply side from catching up with the demand side. They further confirm the FOMC’s statement issued after its regular meeting on Wednesday afternoon, indicating that vaccinations have helped improve the employment situation.
Here’s a quote from the FOMC report.
“With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen. The sectors most adversely affected by the pandemic have improved in recent months, but the summer’s rise in COVID-19 cases has slowed their recovery.”
Both reports bode well for the Labor Department’s October payroll report Friday. Economists expect the U.S. economy to have created 400,000-450,000 jobs in October, with the unemployment rate staying around 4.8%. The focus of market attention will be on wages, which are expected to gain 4.6% from the previous year.
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