This is partly due to the sharp increase in the number of unemployed in California.
The number of initial applications for unemployment benefits in the United States last week unexpectedly increased amid a sharp increase in the number of unemployed in California. But in general, the labor market continues to recover confidently.
As reported by the Ministry of Labor on Thursday, the number of initial applications for assistance last week increased by 16,000 to 351,000, taking into account seasonal fluctuations. Economists polled by Reuters predicted 320,000 applications.
In California, the number of requests increased by 24,221 without taking into account the seasonal factor. The surge offset a sharp decline in the number of applications in Louisiana affected by Hurricane Ida in late August.
The average number of applications in four weeks, which is considered a more accurate indicator of labor market trends as it smooths weekly volatility, fell by 750 to 335,750 last week.
Meanwhile, the Federal Reserve on Wednesday gave an optimistic outlook on the economy, paving the way for a reduction in monthly bond purchases “in the near future” and making it clear that interest rates may rise earlier than expected.
In August, job growth slowed to a seven-month low amid declining leisure and hospitality employment due to a sharp increase in coronavirus incidence caused by the spread of the Delta strain.
Factors associated with the pandemic cause a shortage of labor, which restrains the growth of employment. Fed Chairman Jerome Powell told reporters he expected “faster employment growth” as these factors, including a lack of affordable childcare and fear of contracting the virus, would weaken over time.
In July, a record number of vacancies was registered – 10.9 million. The Fed forecast an unemployment rate of 4.8 percent this year, while in June the forecast was 4.5%. The unemployment rate in August was 5.2%.