351,000 Americans filed for unemployment benefits last week, more than expected.
The market was looking for 320,000. The range, from 42 economists, was 300,000 to 338,000, so the actual headline print was considerably worse than the most pessimistic guess.
The prior week was revised slightly higher. The four-week moving average is now 335,750 (figure below).
Continuing claims missed too. The market was expecting a decline to 2.6 million. Instead, ongoing claims during the week ended September 11 rose 131,000 to 2.85 million.
Although nothing to write home about (unless you lost your job, in which case you might “write” home to tell your significant other and your children that the mortgage payment is now in jeopardy), the uptick marked the second consecutive weekly increase (simple figure below).
This, as pandemic emergency programs roll off and the fate of the labor market hangs on the extent to which the expiration of benefits nudges people back to work, thereby alleviating the pervasive labor shortages which created the largest disparity between vacancies and hires on record.
Speaking of expiring UI, Goldman took a deep dive into the subject earlier this month.
“Individual-level data continue[d] to show a clear impact of UI-benefit expiration on the job finding rates of unemployed workers in August,” the bank said, in a note.
Joseph Briggs found that UI-benefit expiration increased “the job-finding probability of workers who were unemployed in July by over 8pp and provided a cumulative 10pp boost for workers who were unemployed in June.”
Naturally, the effect was more pronounced for those who experienced a total loss of benefits compared to those who lost only the $300 supplement.
On the other hand, Goldman found that the effect “was statistically insignificant for leisure and hospitality workers, likely reflecting the Delta variant drag that weighed on August employment.” As a reminder, leisure and hospitality hiring was unchanged last month.
Additionally, Briggs said benefit expiration didn’t compel those who were not in the labor force to reenter the fray, a finding “which continues to suggest non-financial reasons, such as concern about COVID spread, may be keeping many workers out of the labor force.”
