Read for 5 minutes (Reuters) – WASHINGTON (Reuters) – Last week, the number of Americans filing new unemployment claims fell more than predicted, while layoffs fell to a 21-year low in June as businesses clung to their employees amid labor shortages. PHOTO FROM THE FILE: After coronavirus disease (COVID-19) limitations were relaxed, line cook Ray Liberge, 48, visits a job fair for restaurant and hotel workers in Torrance, California, U.S., on June 23, 2021. Lucy Nicholson/Reuters The Labor Department said on Thursday that initial claims for state unemployment benefits fell 51,000 to a seasonally adjusted 364,000 for the week ending June 26. However, since May, when claims fell below 400,000 for the first time since March 2020, when mandatory shutdowns of non-essential companies were imposed to limit the initial wave of COVID-19 infections, the rate of fall has slowed. Claims rose in mid-June, breaking a run of six consecutive weekly declines. Reuters polled economists, who predicted 390,000 applications for the most recent week. Claims have decreased from a high of 6.149 million in early April 2020, but they remain over the 200,000-250,000 range that is considered healthy. The government’s use of the so-called seasonal factor to smooth out cyclical swings from the statistics has been blamed for some of the current increase in claims. “The recent rise is partly due to a less favorable seasonal factor, which could put some further upward pressure on initial claims over the summer months if seasonal hiring is less strong than usual this year due to factors causing various labor shortages,” said Veronica Clark, an economist at Citigroup in New York. “Overall, we predict a declining trend to continue in the next months.” In the next weeks, the claims statistics may get noisier as 26 states, primarily led by Republican governors, withdraw from federally supported unemployment programs, including a $300 weekly check, which companies said was encouraging the unemployed to stay at home. The early termination started on June 5 and will go until July 31, when Louisiana, the only state with a Democratic governor, will terminate the weekly check. These advantages will expire on September 6 for the remainder of the country. In the 20 states that have already terminated federal payments, there has been little evidence of an increase in job searches. While the vast majority of the unemployed said they would like to start looking for employment in the next three months, many did not express a feeling of urgency, according to a survey released this week by job search engine Indeed. However, rising vaccination costs, depleting funds, and the start of school in the autumn will all play a role in re-engaging them in the workforce. Workers, especially women, have been accused for staying at home due to a lack of cheap child care and fears of acquiring the coronavirus. At the end of April, there were a record 9.3 million job opportunities, and 9.3 million people were officially unemployed in May. Pandemic-related restrictions on companies and mask demands have been eased now that at least 150 million Americans have been completely inoculated against the virus. The reopening of the economy has resulted in a surge in demand, leaving firms in desperate need of employees. Job losses reported by U.S.-based firms fell 16.7% to 20,476 in June, the lowest level since June 2000, according to a second survey released on Thursday by global outplacement agency Challenger, Gray & Christmas. In June 2020, there were 88 percent fewer layoffs than in June 2020. In the second quarter, 67,975 jobs were lost, the fewest since the April-June period of 1997. Layoffs fell 87 percent in the first half of this year, to 212,661, the lowest figure for the January-June period since 1995. “The rubber band is snapping back,” Andrew Challenger, senior vice president of Challenger, Gray & Christmas, said. “Companies are clinging on their employees at a time when job opportunities are at an all-time high and job seekers’ confidence is at an all-time high. Since the Dot-Com boom, we haven’t seen job cuts this low.” The layoff data are another another positive sign for the government’s much-anticipated June employment report, which is set to be announced on Friday. However, labor shortages continue to be a concern in the employment process. According to a Reuters poll of experts, nonfarm payrolls likely grew by 700,000 jobs in June after increasing by 559,000 in May. The unemployment rate is expected to fall to 5.7 percent this month, down from 5.8 percent the previous month. The Conference Board announced on Tuesday that the so-called labor market differential in its consumer confidence survey, which is generated from data on respondents’ perceptions on whether jobs are plentiful or difficult to come by, jumped to its highest level since 2000 in June. Last month, private firms employed more workers than planned. Lucia Mutikani contributed reporting, and Paul Simao edited the piece./n
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