According to the Labor Department, jobless claims fell to a new pandemic low last week.
Here are the numbers:
- First-time benefit applications fell by almost 30,000 to a seasonally adjusted 348,000.
- This marks the lowest level of new claims since the pandemic’s commencement in March of last year.
- The four-week moving average fell to 377,750, which also marks a new pandemic low.
- Last week marked the 4th straight week that new jobless claims have fallen.
- It also was the first time they were down more than 50% since January.
- Continuing claims, for regular state programs, fell to a seasonally adjusted 2.8 million.
- This marks the lowest level of continuing claims since the pandemic’s commencement
Taken together, these trends exemplify a strong labor market. This being said, the pandemic’s unpredictability has proven time and time again that it can alter situations overnight; and now, with the Delta variant, everything feels up in the air again – even though the numbers aren’t reflecting it.
Point Loma Nazarene University economist Lynn Reaser, predicts that the variant may be able to jeopardize job growth in the short run. According to her, “we are seeing some slowing and reluctance of consumers in restaurants, entertainment and then travel. For manufacturers, the Delta variant is exacerbating parts shortages. Increased worker absenteeism also is disrupting operations.” With so many converging tides, some companies and owners have transitioned their focus towards maintaining operations rather than constantly looking at future expansion and endeavors.
Overwhelmingly, however, companies and owners have been the ones struggling to uphold their employee pool. The labor shortage is untraditional in that employers are desperately seeking workers, and adding a record number of 943,000 jobs in July, however workers simply are not coming back to take these positions; the U.S. Bureau of Labor Statistics has found that for every 1.5 jobs posted, there is only 1 job seeker available. As a result, there are now 5.7 million less positions on payroll in July of this year than there were in February of last year.
The restaurant industry has felt the effects of this labor shortage very acutely, especially as the Delta variant rages on and restaurants are hit with masking and vaccination requirements. In response to the question – “how is the labor shortage impacting your organization” – asked during a Nation’s Restaurant Association webinar, businesses reported a:
- Significant reduction in applicant pool for open positions – 93.1%
- Increased strain on staff related to shortages – 93.1%
- Applicants not showing up for interview – 90.3%
- Increased turnover – 56.9%
- Decreased customer satisfaction – 51.4%
- Loss of revenue – 51.4%
- Lack of training resources – 12.5%
Overall, and as much as the future remains uncertain, the data nonetheless shows some much-needed positivity. As Morgan Stanley senior economist Robert Rosener explains, “We shouldn’t necessarily assume that rising cases are going to translate to rising jobless claims. The data we’re seeing shows that while certain consumer areas may be starting to cool, activity does remain solid and labor demand remains extremely strong.”
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