Weekly unemployment claims held near their lowest levels since the 1960s, with a strong labor market and improving levels of unemployment remaining a bright spot in the U.S. economy.
The Labor Department released its latest weekly jobless claims report Thursday at 8:30 a.m. ET. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:
Initial jobless claims, week ended April 16:184,000 vs. 180,000 expected and an upwardly revised 186,000 during prior week
Continuing claims, week ended April 9:1.417 million vs. 1.459 million expected and an unrevised 1.475 million during prior week
First-time filings for unemployment benefits remained below 200,000 for a ninth consecutive week. As of last week, the four-week moving average for new jobless claims, which smooths out volatility in the weekly data, stood at just 177,250. Throughout 2019 before the pandemic, new claims averaged about 218,000 per week. And last month, jobless claims reached their lowest level since 1968 at 166,000.
Continuing claims, which tally the number of Americans collecting benefits for multiple weeks, have also declined sharply to reach multi-decade lows. These came in below 1.5 million for a back-to-back week to reach their lowest level since 1970.
The weekly jobless claims data have served as an ongoing reminder of the tightness in the current labor market. Job openings have far outpaced new hires — a phenomenon many companies this quarterly earnings season have been quick to acknowledge.
"Transportation and labor markets remain tight," Andre Schulten, Procter & Gamble chief financial officer, said during the company's earnings call Wednesday morning. "Labor availability is certainly a stretch, not for P&G directly, but more for our supplier base."
Companies in other industries have also highlighted these concerns. Bank of America CFO Alastair Borthwick said during the firm's earnings calls earlier this week that the bank's clients "are definitely seeing supply chain challenges" that have extended to the workforce.
"We've also seen inflation, and we're seeing labor and wage pressure," Borthwick said.
And rising labor costs as companies compete for talent could ultimately exert even further pressure on corporate profit margins.
"For companies, labor costs, which account for roughly 70% of total costs, are far more important that materials costs," Rubeela Farooqi, chief economist at High Frequency Economics, wrote in a note Tuesday. "While wage gains are not keeping up with price increases, building cost pressures are a risk for company bottom lines."
"Before-tax corporate profits rose 25% year-over-year in Q4 2021 after 27% in Q3 and 69% in Q2. But with the Fed moving to dampen demand, how long will businesses be able to pass on increasing cost?" she added. "The silver lining may come from a rebalancing of labor supply and demand, which could provide relief to businesses on wages going forward."
