By Lucia Mutikani
WASHINGTON (Reuters) – The number of Americans filing new jobless claims fell more than expected last week, as layoffs tumbled to a 21-year low in June as companies held back workers amid labor shortages.
The state’s initial jobless claims fell by 51,000 to a seasonally adjusted figure of 364,000 in the week ended June 26, the Labor Department reported on Thursday.
But the pace of decline has slowed since May, when orders dropped below 400,000 for the first time since March 2020, when non-essential business shutdowns to stem the first wave of Covid-19 infections began.
Orders increased in mid-June, interrupting a period of six consecutive weeks of decline. Economists polled by Reuters predicted 390,000 new orders for the last week.
Orders fell from a record 6.149 million in early April 2020, but remain above the 200,000 to 250,000 range that is seen as consistent with healthy labor market conditions.
Part of the recent rise in orders has been attributed to the so-called “seasonal factor,” which the government uses to eliminate seasonal fluctuations in the data.
With at least 150 million Americans fully vaccinated against the coronavirus, pandemic-related restrictions on companies and the mandatory use of a mask have been lifted. The reopening of the economy has led to an explosion in demand, leaving companies desperate for workers.
In a second report released on Thursday, global outplacement firm Challenger, Gray & Christmas said job cuts announced by US employers fell 16.7% to 20,476 in June, the lowest level since June 2000. Layoffs plummeted 88% compared to June 2020.
There were 67,975 job cuts in the second quarter, the lowest since the April-June 1997 period. In the first half of this year, layoffs fell 87% to 212,661, the lowest total number for the January-June period since 1995 .
The layoff numbers are another good omen for the government employment report for June, which will be released on Friday. But labor shortages continue to loom over hiring.
The expectation is that 700,000 job openings outside the agricultural sector will have been created in June, after an increase of 559,000 in May, according to a Reuters survey. The unemployment rate is expected to decrease from 5.8% in the previous month to 5.7%.
(By Lucia Mutikani)
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