The numbers: New applications for U.S. unemployment benefits rose last week to a one-month high, but the increase appeared to stem largely from California catching up on a backlog of claims instead of any deterioration in the U.S. economy.
Initial jobless claims rose by 16,000 to 351,000 in the week ended Sept. 18, the government said Thursday . Economists polled by The Wall Street Journal had estimated new claims would total a seasonally adjusted 320,000.
Earlier in September new weekly claims for benefits had tumbled to a pandemic-era low of 312,000. Before the viral outbreak in spring 2020 they were in the low 200,000s.
New claims filed through a temporary federal program that pays extra unemployment benefits slid to 15,162 from 23,037. The federal program expired on Sept. 6, however, and it’s unclear if any of those filers will actually get any money.
Big picture: The U.S. economy has a lot of demand for labor. What it lacks is enough people who are willing to go back to work.
The economy has grown rapidly since early this year and businesses are eager to fill a record number of job openings. Their biggest problem is finding enough qualified workers.
It’s so hard to hire that companies are very reluctant to fire any one, a chief reason why jobless claims have been on the wane this year.
The loss of benefits for millions of people could stunt the economy’s momentum, analyst say, but not enough to cause a robust U.S. recovery to stall. Most of the unemployed are expected to return to the labor force in the near future.
Key details: The number of new jobless claims reported by California shot up by an unadjusted 24,221 to 75,817 — an unusually large increase.
The state has struggled to process a large backlog of claims during the pandemic. At one point it briefly stopped accepting applications while it implemented new technology to prevent fraud and speed up the process.
The only other state to report a large increase was Virginia, where new claims rose by almost 13,000. It’s unclear why.
New claims fell in Louisiana and Texas in the wake of Hurricane Ida. They also declined in New York.
The number of people already collecting state jobless benefits, meanwhile, rose by 131,000 to a seasonally adjusted 2.85 million. These so-called continuing claims had fallen to a pandemic low in the prior week.
Altogether, some 11.3 million people were reportedly receiving benefits through eight separate state or federal programs as of Sept 4. The federal claims data is released with a two-week lag.
About 8.5 million people had been collecting money from the federal program before it lapsed.
What they are saying? “Unusually high layoffs in some states, particularly California, make the latest numbers particularly suspect,” said Robert Frick, corporate economist at Navy Federal Credit Union.
“This is what I have in the past referred to as statistical gibberish — there is no way that layoffs in Virginia really quadrupled in one week,” chief economist Stephen Stanley of Amherst Pierpont Securities wrote to clients. “I would expect the number of new filers to come back down next week.”