Latest News

Economic Report: U.S. jobless claims jump to one-month high of 351,000 on big increase in California

The numbers: Applications for U.S. unemployment benefits rose last week to a one-month high in what largely appears to be a case of California catching up on a large backlog of claims.

Initial claims for jobless benefits rose by 16,000 to 351,000 in the week ended Sept. 18, the government said Thursday. Economists polled by The Wall Street Journal had estimated new claims would total 320,000.

Earlier in the month new jobless claims had tumbled to a pandemic-era low of 312,000. They are now about 125,000 above precrisis levels.

New claims filed through a temporary federal program that paid extra unemployment benefits slid to 15,162 from 23,037. The federal program expired on Sept. 6, however, and it’s unclear if any of those filers will actually get any money.

Read: White House tells states they can keep paying extra jobless benefits

Big picture: The U.S. economy has a lot of demand for labor. What it lacks is enough people who want to work.

The economy has grown rapidly since early this year and businesses are eager to fill a record number of job openings. Their biggest problem is finding enough qualified workers.

Read: Half of all small businesses can’t find enough workers to fill open jobs

It’s so hard to hire that companies are very reluctant to fire any one, a chief reason why jobless claims have been on the wane this year.

The loss of benefits for millions of people could stunt the economy’s momentum, analyst say, but not enough to cause a robust U.S. recovery to stall. Most of the unemployed are expected to return to the labor force in the near future.

Read: The Fed has bet on a future of low inflation. Here’s what could go wrong

Key details: The number of new jobless claims reported by California shot up by 24,221 to 75,817 — an unusually large increase.

The state has struggled to process a large backlog of claims during the pandemic. At one point it briefly stopped accepting applications while it implemented new technology to prevent fraud and speed up the process.

The only other state to report a large increase was Virginia, where new claims rose by almost 13,000.

New claims fell in Louisiana and Texas in the wake of Hurricane Ida. They also declined in New York.

The number of people already collecting state jobless benefits, meanwhile, rose by 131,000 to a seasonally adjusted 2.85 million. These so-called continuing claims had fallen to a pandemic low in the prior week.

Altogether, some 11.3 million people were reportedly receiving benefits through eight separate state or federal programs as of Sept 4. The federal claims data is released with a two-week lag.

About 8.5 million people had been collecting money from the federal program before it lapsed.

Market reaction: The Dow Jones Industrial Average
DJIA,
+1.00%

and S&P 500
SPX,
+0.95%

were set to open higher in Thursday trades.

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News