Initial unemployment insurance claims fell to a new pandemic-era low last week, the Labor Department reported Thursday.
Initial benefit claims were 360,000, which is in line with Dow Jones estimates and the best number since March 14, 2020.
The grand total was a significant decrease from the previous week’s upward revision of 386,000.
Inventory claims, which lagged a week behind the headline, also fell sharply, declining 126,000 to 3.24 million. This has also created a new low for a labor market that still has a few steps to go before returning to its pre-Covid 19 self but has made significant strides.
Markets reacted little to the claims reports as stock market futures turned down and government bond yields fell slightly after the release.
Those receiving benefits under all government programs also fell sharply, falling 449,642 to 14.2 million by June 19. That’s well above anything seen before the pandemic, but well below the 33.2 million who stood on the reels a year ago.
As the labor market recovers, several countries have stopped the improved benefits they had been receiving since the beginning of the crisis. Federal benefits expire in September, and economists expect new employees to rise to record levels of job vacancies. Labor force participation has fallen 2.7% since February 2020 and the total number of workers counted as unemployed is more than 3.7 million higher.
Production in New York is increasing at a record pace
A separate economic report released Thursday showed that manufacturing and recruitment are booming in key New York.
The Empire State Manufacturing Survey, conducted by the New York Federal Reserve, rose to a record 43 in July, which is the percentage difference between companies expanding versus shrinking.
Incoming orders and deliveries rose sharply, while the employment index rose 8.3 points to 20.6, as 29.5% of companies said they were hiring new workers. A forward-looking index of conditions for the next six months also showed an increase in new hires at 43.9, 2.2 points more than in June.
The news comes a day after the Fed’s Beige Book was published on the economy across the country. This report showed “moderate to robust growth” at the national level, while the New York area reported a “strong pace” of the economy as business contacts were “increasingly optimistic about the near-term outlook”.
While New York reported a surge in growth, the Philadelphia area announced Thursday that progress was slowing.
Production value in this area fell from 30.7 in the previous month to 21.9 in July, although headline numbers still indicated expansion.
Both reports also indicated some slowdown in the rate of inflation amid otherwise high levels of inflation.
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