WASHINGTON (Reuters) – The U.S.
Last week, the number of Americans submitting new claims for unemployment benefits fell near to a 19-month low, indicating that a labor shortage, rather than a decreasing demand for labor, was to blame for slower job growth.
For the week ending Oct. 9, initial claims for state unemployment benefits fell 36,000 to a seasonally adjusted 293,000.
That was the lowest level since the middle of March 2020.
Reuters polled economists, who predicted 316,000 claims for the most recent week.
With the second consecutive weekly drop, claims are now at the higher end of the 250,000-300,000 range considered to be indicative of a robust labor market.
Claims have fallen from a peak of 6.149 million in early April 2020.
Last Friday, the government announced that nonfarm payrolls grew by only 194,000 in September, the fewest in nine months.
The slowing in employment growth is mostly due to a labor shortage as well as a skills mismatch, according to official statistics released on Tuesday, which showed 10.4 million job vacancies at the end of August.
Other economies are also experiencing labor shortages as a result of the COVID-19 epidemic.
With coronavirus infections caused by the Delta variety on the decline and schools completely reopened for in-person learning, there is reason to believe that more Americans will return to work.
The labor shortage may likely alleviate in the coming months, when federal government-funded benefits expire in early September.
However, due to growing self-employment, enormous savings, and early retirements, as well as a robust stock market and record home price rises, the labor pool may stay thin for some time.
Because there are fewer employees to create raw materials and commodities, as well as convey them to markets, labor shortage is clogging up the supply chain, fueling inflation.
The Labor Department said on Thursday that its producer price index for final demand rose 0.5 percent in September after rising 0.7 percent in August.
After rising 8.3 percent in August, the PPI increased 8.6 percent year on year in the 12 months to September, the highest year-on-year increase since November 2010, when the series was relaunched.
Reuters surveyed economists predicted the PPI would rise 0.6 percent on a monthly basis and 8.7 percent year on year.
The data came on the heels of Wednesday’s announcement of a robust increase in consumer prices in September, led by substantial hikes in food, rents, and a variety of other items.
Minutes of the Federal Reserve’s policy meeting on September 21-22, published on Wednesday, revealed that several US central bank officials “raised worries that higher rates of inflation might feed through into longer-term inflation expectations of individuals and companies.”
