New weekly jobless claims touched a fresh pandemic-era low yet again this week, as labor shortages and companies' efforts to bring on and retain workers, helping to put a cap on the pace of firings and other separations.
The Labor Department released its jobless claims report Wednesday morning, or a day earlier than usual due to the Veterans Day holiday on Thursday. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:
Initial unemployment claims, week ended November 5: 267,000 vs. 260,000 expected and a revised 271,000 during prior week
Continuing claims, week ended October 30: 2.160 million vs. 2.050 million expected and a revised 2.101 million during prior week
Though claims were a touch higher than expected, they still held below the psychologically important 300,000 level for a fifth straight week and reached their lowest level since March 2020, taking out last week's pandemic-era low. New claims have been coming in at less than half their rate from this time last year, when claims were averaging more than 700,000 per week.
The total number of claimants across all programs has also fallen precipitously and reached 2.57 million for the week ended Oct. 23. This metric, which encompasses those claiming both regular state continuing claims and benefits from programs, has fallen sharply since early September, when federal pandemic-era enhanced unemployment benefits expired at the national level. Total claimants across all programs totaled well over 21 million in the comparable period last year.
Although the labor market as a whole has yet to reach its pre-pandemic conditions, many signs have pointed to a pick-up in labor activity. Last week's October jobs report showed a better-than-expected 531,000 non-farm payrolls came back last month, or the most since July. But although payrolls have grown in every month so far in 2021, the economy is still more than 4 million jobs short of pre-pandemic levels following plunges in employment between March and April 2020. And as of last month, the civilian labor force was still down by nearly 3 million individuals, compared to February 2020.
Labor supply challenges have been especially onerous. In the past several weeks alone, an array of companies — from Hyatt (H) to Yum! Brands (YUM) and Whirlpool (WHR), among many others — have cited difficulties in hiring enough workers to meet consumer demand. And by Bank of America's count, mentions about "labor" on corporate third-quarter earnings calls have risen by 250% so far from the same period last year.
"Candidly, demand came back faster than this industry expected. And we've had a challenge bringing people back into the workforce," Keith Barr, IHG Hotels and Resorts CEO, told Yahoo Finance on Tuesday. "We estimate that we're down between 25% to 30% in this industry. But we did see positive trends in October with the jobs report here in the U.S. And a significant portion of those jobs are in hospitality."
Still, some companies have managed to navigate the supply shortages more effectively than others. Lyft (LYFT), for instance, noted that it saw a 45% increase in active drivers in its most recent quarter, and CVS Health (CVS) CEO Karen Lynch said on the company's earnings call it hired "a record number of workers in the third quarter to advance open enrollment and customer service" and in its technology and clinical capabilities roles. Sam's Club CEO Kathryn McClay recently told Yahoo Finance the company was "at full employment in the field."
Many of the companies that have managed to keep up with hiring have been those that have raised wages or otherwise offered additional benefits to employees, many economists noted.
"There is a price for labor where supply and demand will clear," wrote Rubeela Farooqi, chief economist for High Frequency Economics, in a note. "To appeal to workers, businesses have to either offer competitive wages, reduce the scope of their operations, or fail. In today's economy, these dislocations have yet to be resolved."
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck