New filings for unemployment benefits beat estimates with a decrease of 6,000 for the week ending Oct. 16, reaching 290,000 initial jobless claims. That’s the lowest level since March 14, 2020, according to a report from the Department of Labor on Thursday.
As strong demand dominates the labor market and labor shortages remain a challenge, initial jobless claims—a proxy for layoffs—have continued to trend toward their pre-pandemic level, which was around 212,000. With such a tight labor market, it is possible that we might see new jobless claims reach their pre-pandemic level by the end of the year.
As a result, our preferred measure for new jobless claims, the 13-week moving average, also declined for the same week to 345,000 from 356,000 in the previous week, a new pandemic low.
The total number of claims for all programs for the week ending Oct. 2 decreased to 3.28 million from 3.65 million in the prior week, according to the report, and from 23.76 million compared to a year ago.
Claims for pandemic-related federal unemployment benefit programs—which expired in early September—continued to fall in the same period.
Despite the sharp drops in these claims in recent weeks, firms saw little to no change in labor availability, according to anecdotal evidence released in the Fed’s Beige Book on Wednesday.
At the same time, continuing claims for regular extended benefits declined significantly to 134,379 for the week ending Oct. 2 from 222,613 the previous week.
The largest increases in initial claims for the week ending Oct. 9 were in Michigan and Missouri, up 3,673 and 2,566 respectively, while the largest decreases were in Tennessee and California, down 989 and 851 respectively.
