The number of Americans filing first-time claims for unemployment rose last week to 351,000, the Labor Department reported on Thursday.
The number was above expectations of 320,000 and an increase above the prior week’s revised 335,000. The four-week moving average was 335,750, a decrease of 750 from the previous week’s revised number.
Although it failed to beat expectations, the reading keeps the weekly number below the 400,000 threshold, as the delta variant of the coronavirus continues to wreak havoc with businesses, both causing them to impose social distancing and masking requirements as well as hampering their ability to hire additional workers.
Political Cartoons on the Economy
Federal Reserve Chairman Jerome Powell acknowledged the harm the virus was doing to the economy on Wednesday as the central bank lowered its forecast for 2021 growth in the nation’s gross domestic product to 5.9% from its prior 7% forecast. The Fed did raise its forecast for 2022 to 3.8% from 3.3%
Andrew Hunter, co-founder and economist at online job engine Adzuna, says that firms with a need for in-person help such as restaurants and hotels, are finding it necessary “introduce perks and benefits that cater to what employees are looking for now – flexibility, a strong work culture and experience, competitive compensation, generous (leave) policies, great healthcare coverage, and benefits that help with childcare and continued education.”
Still, he adds, some are unable to offer that flexibility due to the demands of their businesses. “Because of this, we’re seeing people take a wait-and-see approach to job searches, as they are hopeful they can find something that checks all of the boxes of what they are looking for. Both office and deskless workers have completely reimagined what would make an ideal role for them.”
Restaurants, in particular, are finding ways to cope amid the staffing shortage, says Dirk Izzo, president and general manager at NCR Hospitality, which provides technology solutions to the industry.
“Many restaurants, especially (small businesses) are at their bare minimum from a staffing perspective, however, the good news is they are balancing things financially thanks to continued enhancements in the customer experience around things such as online ordering and curbside pickup which has begun to outpace dining-in,” Izzo says.
“As the holiday season approaches, the good news is we don’t anticipate a repeat of 2020,” he adds. “There appears to be a lot of pent-up demand by consumers to dine out around the holidays and restaurant owners are confident they will be able to manage this potential surge with the right balance of in-person interaction and technological innovation.”
The job market has recovered significantly from the coronavirus pandemic of 2020, but the resurgence of delta cases has disrupted that in the past two months. In August, employers added only 235,000 jobs, well below expectations. Concerns over child care and workplace safety are often cited as the key reasons why people have been reluctant to return to the workplace.
“As the Federal Reserve’s collective economic forecasts released yesterday suggested, further progress on the unemployment rate may not be as promising this year as earlier hoped largely as the Delta variant pushes some economic activity into the future,” said Mark Hamrick, senior economic analyst at Bankrate. “The Fed’s Summary of Economic Projections looks for 4.8% unemployment by year-end, instead of the forecast in June of 4.5%. It looks for matching the pre-pandemic low of 3.5% in 2023.”