A week after dropping below 300,000, US jobless claims fell again to a new pandemic-era low.
The 6,000 decrease from the previous week’s upwardly-revised headline took initial claims to 290,000.
The four-week moving average dropped to 319,750 (figure below).
Consensus expected 297,000 on the headline initial claims print, so this was another beat.
Continuing claims for the week of October 9 were 2.48 million, also below estimates (2.55 million).
At the margins, it was further evidence that the labor market retains a semblance of momentum, despite well-documented frictions including an acute shortage of workers. The drop to fresh pandemic lows came on the heels of consecutive weekly increases which momentarily raised eyebrows (figure below).
Incremental progress aside, the latest JOLTS data, while “stale,” again underscored the acute nature of America’s labor shortage. Despite a drop in openings, the disparity between vacancies and hires remained near record levels at the end of August. The quits rate hit a new all-time high.
In all likelihood, the grind lower in claims will level off at some point and monthly payrolls will continue to show a maddeningly slow trudge back towards full employment.
There will be no definitive “answers” to pressing questions about whether and to what extent government assistance delayed a return to “normal.” Ambiguity will linger in perpetuity. Economists will write papers. Nobody will read them. Academics will draw conclusions. Nobody will care.
Meanwhile, partisan rancor continues to cloud the outlook for the broader economy. Months of Democratic infighting has now “succeeded” in stripping away key pillars of the White House’s fiscal plan, including a sweeping climate initiative and free community college.
Ironically considering the level of uncertainty, it’s pretty clear where things are headed.
The US economy will find its way back to something that looks like “normal” within a year or two. The poor will stay poor. And the rich will get richer.
Joe Biden tried to abide by that old adage about “never letting a good crisis go to waste.” But as it turns out, US politics is now so intractably fraught that even the most cynical political maxims no longer apply.