WASHINGTON (AP) – The number of Americans applying for unemployment benefits has fallen to its lowest level since the pandemic began, a sign that the labor market is still improving, even though employment has declined in the last two months.
Unemployment claims fell 36,000 to 293,000 last week, the second fall in a row, the Department of Labor said Thursday. This is the smallest number of people who have applied for benefits since the week of March 14, 2020, when the pandemic intensified and the first time claims had fallen to less than 300,000. Applications for unemployment assistance, which generally follows the pace of redundancies, have fallen steadily since last spring, as many companies struggling to fill jobs have stuck with their workers.
The decline in layoffs comes in the midst of an otherwise unusual labor market. Employment has been slowing down for the last two months, even as companies and other employers have added an almost record number of open jobs. Companies are struggling to find workers as about three million people lost jobs and stopped looking for work as the pandemic has not yet resumed their job searches. Economists hoped more people would find work in September as schools reopened, eased childcare restrictions and increased unemployment assistance ended nationwide.
But the pickup did not happen, with employers add only 194,000 jobs last month. In a bright spot, unemployment fell to 4.8% from 5.2%, although some of this decline happened because many of those without a job stopped looking for work and were no longer considered unemployed. The proportion of women working or looking for work fell in September, probably due to difficulties in finding childcare or due to schools being interrupted by COVID-19 outbreaks.
At the same time, the Americans finish their jobs with a record number of numbers, with about 3% of workers doing so in August. Workers in particular have been likely to leave their jobs at restaurants, bars and hotels, possibly spurred on by fears of the delta variant of COVID-19, which was still spreading rapidly in August.
Other workers are likely to stop taking advantage of higher salaries offered by companies with open positions. Average hourly wages rose by a healthy 4.6% in September from a year earlier, and for restaurant workers, wage increases in the past year have peaked at 10%.
The number of people who continue to receive unemployment benefits has also fallen sharply, mostly as two emergency relief programs have been completed. In the week ending September 25, the latest available data, 3.6 million people received some form of unemployment assistance, down sharply from 4.2 million in the previous week. A year ago, nearly 25 million people received benefits.
The emergency programs provided, for the first time, unemployment benefits to the self-employed and gig workers and those who had been unemployed for more than six months. More than 7 million Americans lost weekly financial aid when these two programs expired on September 6th. An additional $ 300 in federal unemployment assistance also expired that week.
Many business leaders and Republican politicians said the extra $ 300 discourages those out of work from taking jobs. However, in about half of the states, the additional controls were discontinued as early as mid-June, and these states have not experienced faster job growth than states that retained the benefits.
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