U.S. states posted a bigger-than-expected drop in new jobless claims last week as impacts related to Hurricane Ida and the Delta variant's summer spike receded.
The Labor Department released its weekly jobless claims report Thursday morning. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:
Initial unemployment claims, week ended October 2: 326,000 vs. 348,000 expected and an upwardly revised 364,000 during prior week
Continuing claims, week ended September 25: 2.714 million vs. 2.766 million expected and an upwardly revised 2.811 million during prior week
Thursday's report ended a three-week streak of increases in new weekly jobless claims. First-time filings had reached 312,000, or the lowest level since March 2020, in early September before rising. Some economists attributed this to an uptick in coronavirus cases and disruptions due to Hurricane Ida, which may have caused some individuals to delay filing to mid-month.
With the four-week moving average for claims hovering around 344,000, weekly filings have come down precipitously from their pandemic-era highs. And beyond new claimants, the total number of continuing claimants across state unemployment benefits has also come down markedly.
As of the week ended Sept. 18, about 4.2 million individuals were claiming benefits across all unemployment programs, compared to 5 million during the prior week. These figures have come down sharply in recent weeks in large part due to the expiration of crisis-era federal unemployment programs on Sept. 6. However, even prior to this, total claimants had also been trending lower over the course of 2021 as rehiring activity picked back up.
At the same time, jobless claims and sidelined workers have held stubbornly above their pre-pandemic averages, even as employers struggle to bring back workers at a fast enough clip to meet heightened demand. These labor shortages have compounded with a host of other supply-side disruptions to exert ongoing pressure to the overall economic recovery.
"While there are some encouraging signs that the worst may have passed with the Delta variant of COVID-19, which took wind out of the proverbial sails of the economic recovery, supply chain challenges and rising prices persist with no immediate sign of substantial resolution or improvement," Mark Hamrick, senior economic analyst for Bankrate, said in an email. "Cargo ships unable to head to West Coast ports, a trucker shortage and lack of sufficient rail capacity are among the complicating factors all conspiring to boost product and component bottlenecks when retailers are very much focused on the holiday shopping season."
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck