Jobless claims fell again last week, the government said Thursday.
444,000 Americans filed for unemployment benefits in the week ended May 15, the fewest of the pandemic era (figure below). The previous week’s total was revised marginally higher.
The four-week moving average fell to 504,750, the lowest since March 14, 2020.
Initial claims have fallen by around half since Joe Biden took office. The US is now 250,000 below the pre-pandemic record set in 1982.
It was the fifth week in six that initial claims fell (figure below).
Continuing claims disappointed, rising 111,000 to 3.75 million in the week ended May 8. That was higher than estimates. The market was looking for 3.63 million.
The steady grind lower in initial claims suggests ongoing progress in the labor market, although we’re still living in the shadow of April’s NFP downside “shocker.” The GOP continues to insist enhanced unemployment benefits are discouraging the jobless from returning to work, although concrete evidence of that is scant outside of anecdotes about labor shortages.
Crucially, it’s not that anyone doubts businesses are having problems hiring “qualified” workers. There is evidence to support that contention (figure below).
Rather, quite a few folks are skeptical about the notion that jobless benefits are the proximate cause of the problem.
One can conjure a veritable laundry list of contributing factors, and while enhanced unemployment benefits is on that list, I’m not sure it’s at the top.
“The biggest problem in the jobs market does appear to be the lack of supply of workers,” ING’s James Knightley said Thursday, on the way to listing four key contributors (the list, below, is a direct quote from Knightley):
- Not all schools have returned to in-person [learning], meaning many parents that would be going out to work are having to stay home to look after children
- Some workers remain nervous about returning to work given the pandemic is not yet over
- Some older workers who lost their job may have opted for early retirement
- Expanded and uprated unemployment benefits may diminish the attractiveness of seeking work – especially when factoring the cost of commuting and/or childcare
And, as I’ve argued previously, if government benefits are changing the calculus in the labor market by contributing to worker scarcity, thereby strengthening labor’s hand when it comes to negotiating for higher pay, then so be it.
Capital has worked for decades to strip labor not just of the capacity to argue for better wages and benefits, but of its dignity too.
The market for daily financial commentary (whether platform-based or ad hoc, via social media) is chock-full of would-be populists purporting to champion the plight of the American Everyman. And yet, when it comes to the capital versus labor divide, virtually all of those voices land squarely on the side of capital.
Funny how that works.
An odd trend in engineering job specs is that employers seem to be asking for technicians. Since the employers have the funding, why not write the job description as a request for technicians? (Well obviously, if technicians are paid more, then there should be sufficient funding for good pay for the factory floor folks. Then the sky’s the limit for engineering pay!)
One recently e-mailed job description requested: basic theoretical radio-astronomy experience, Linux OS installation expertise, and welding (both TIG and MIG) certification. I’m planning to advise the recruiter that yes, I want to send in my resume (although I know nothing about welding). At the very least, I want to interview the people who wrote that job description.
Data point
Lovely!
Well we will find out a lot when enhanced unemployment benefits roll off in September and in person school comes back in the fall. I also believe there is going to be a second order effect damaging white collar employment coming soon. In businesses whose decline has been accelerated, many businesses have held onto workers during the pandemic to make sure work gets done and morale is somewhat less damaged while remote working. My guess is that this will come to an end very shortly as well. We could well see something of a rebound in service employment , while white collar work for larger companies decline at the same time. Meanwhile work that involves making, building and maintaining real things make a bounce. Nope the volatility in the labor market is not going to end soon.
I agree (see my previous response … “the sky’s the limit” comment on engineering/white collar pay was snarky). I think the people responsible for real-life builds & maintenance may have more job stability – typically that kind of work in at companies that are classified as “industrial”, not “technical”.
“white collar work for larger companies decline at the same time” would bode very ill for consumer spending. The PTON bikes, LULU leggings, and LEN houses are mostly bought by those same white collar workers.
Something to remember about the dichotomy between service and manufacturing employment is that those terms are fairly misleading because while service businesses are fairly easy to classify, most of workers at manufacturing firms are actually service employees of the white collar type like financial services, accounting, human resources, IT engineering, and so forth.
I got a glimpse of the future last week when my daughter’s employer, an international digital ad agency sent all of its employees to the office for two days to get all of their stuff and take it home. While a few IT and ad production personnel would eventually return to reconfigured space to maintain the firm’s large internal cloud and data warehouse, for the foreseable future all the rest of the firm”s employees would be working from home with occasional trips to one of a few physical conference rooms when some face to face time is needed. Her husband’s employer, the largest in the city, has closed most of its space, leasing most of it to other tenants, is reshuffling management and looking to a highly modified future.