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U.S. weekly jobless claims fall below 300,000 in boost to labor market recovery

The number of Americans filing new claims for unemployment benefits dropped below 300,000 last week for the first time in 19 months, further evidence that a shortage of workers was behind slower job growth rather than weakening demand for labor.

Initial claims for state unemployment benefits dropped 36,000 to a seasonally adjusted 293,000 for the week ended Oct. 9. That was lowest level since mid-March 2020, when the nation was in the early stage of the COVID-19 pandemic.

More people are coming off the state unemployment rolls, indicating strong demand for labor. The number of people continuing to receive benefits after an initial week of aid plunged 134,000 to 2.593 million in the week ended Oct. 2, also the lowest level since mid-March 2020.

 

In another report on Thursday, the Labor Department said its producer price index for final demand rose 0.5% in September, the smallest gain in nine months, after increasing 0.7% in August. Economists had forecast the PPI gaining 0.6%.

A 1.3% jump in prices of goods accounted for nearly 80% of the increase in the PPI. Goods prices, which advanced 1.0% in August, were boosted by energy products like gasoline, residential electricity and gas fuels.

 

The price of Brent crude has shot above $80 a barrel. Electric and natural gas prices have also risen, indicating that energy costs could remain elevated.

In the 12 months through September, the PPI accelerated 8.6%, the largest year-on-year advance since November 2010 when the series was revamped, after surging 8.3% in August.

But producer inflation could be nearing its peak. Excluding the volatile food, energy and trade services components, producer prices nudged up 0.1% last month after gaining 0.3% in August. In the 12 months through September, the core PPI increased 5.9% after accelerating 6.3% in August.

 

Reference: Reuters