Jobless Claims May Help Reveal State of the Labor Market: Live Updates
Labor #Labor
Here’s what you need to know: Servers at a restaurant in Columbia, Mo., last week. The labor market is struggling to return to normal after more than a year of being whipsawed by the pandemic.Credit…Jacob Moscovitch for The New York Times
The latest update on the labor market is scheduled to arrive Thursday morning when the government releases its weekly report on jobless claims.
Analysts surveyed by Bloomberg expect that the number of new claims filed will fall slightly from the previous week.
Last week, the Labor Department reported that 505,000 workers filed first-time claims for state benefits in the week that ended May 1. An additional 101,000 new claims were filed for Pandemic Unemployment Assistance, a federal program covering freelancers, part-timers and others who do not routinely qualify for state benefits. Neither figure is seasonally adjusted.
The labor market is struggling to return to normal after more than a year of being whipsawed by the pandemic. Restrictions are lifting, businesses are reopening and job listings are on the upswing. Hiring increased in April but at a slower pace than anticipated.
Whatever Thursday’s report brings, it is sure to fuel the debate over the impact that jobless benefits are playing in the economy’s recovery.
Some employers, particularly in the restaurant and hospitality sectors, have complained of having trouble finding workers. The U.S. Chamber of Commerce and several Republican governors have asserted that a temporary $300-a-week federal unemployment supplement has made workers reluctant to return to the job.
The U.S. Labor Department said that as of Wednesday, six states — Iowa, Mississippi, Missouri, Montana, North Dakota and South Carolina — had notified the department that they were terminating federal pandemic-related unemployment benefits next month.
The unemployment rates in those states in March, the latest month for which data is available, ranged from 3.7 percent in Iowa to 6.3 percent in Mississippi.
A handful of other states with Republican governors, including Tennessee, Arkansas, Alabama, Wyoming and Idaho, have said they also planned to withdraw from the federal program.
But economists are skeptical that jobless benefits are playing anything more than a bit part in the pace of the job market’s recovery.
“There is tremendous churn in this labor market,” said Gregory Daco, chief U.S. economist at Oxford Economics. “There are still major supply constraints, and unemployment benefits are not the most important one. The virus is.”
Prematurely halting benefits is “detrimental to the economy,” Mr. Daco said. “You’re voluntarily hurting certain vulnerable tranches of the population.”
Many workers have children at home who are not attending school in person. Others are wary of returning to jobs that require face-to-face encounters. Covid-19 infections have decreased since September but there are still 38,000 new cases being reported each day and 600 Covid-related deaths. Less than half the population is fully vaccinated.
There is halting progress from employers as well, as businesses continually update their assessment of costs and customer demand. They are wary of locking themselves in to hiring more workers or raising pay when there is so much uncertainty swirling.
Nationwide, the unemployment rate was 6.1 percent, and there are 8.2 million fewer jobs than in February 2020.
An empty gas pump, in Chapel Hill, N.C. Colonial Pipeline said Wednesday it had restarted operations along its Texas-to-New Jersey pipeline, but full restoration of service was expected to take days.Credit…Jonathan Drake/Reuters
Stocks continued to tumble around the world on Thursday after faster-than-expected inflation data in the United States rattled markets the previous day.
The S&P 500 is expected to open 0.4 percent lower when markets open, extending a 2.1 percent drop on Wednesday. It is set to be the fourth straight day of declines for the benchmark index, the longest streak since late February. Nasdaq futures slipped 0.1 percent.
The Stoxx Europe 600 index fell 1.3 percent with the FTSE 100 in Britain falling 2.1 percent and the DAX in Germany declining 1.5 percent. The Nikkei 225 slumped 2.5 percent in Japan and the Hang Seng in Hong Kong dropped 1.8 percent.
The U.S. Consumer Price Index, a measure of inflation, climbed 4.2 percent in April from a year earlier, the fastest pace of increase since 2008. From March to April, prices increased 0.8 percent; economists surveyed by Bloomberg only forecast a 0.2 percent increase.
The yield on 10-year Treasury notes held steady at about 1.7 percent after jumping seven basis points, or 0.07 percentage point, on Wednesday.
Federal Reserve policymakers have said that they expect the current increase in inflation to be transitory and would not set off a pullback in monetary stimulus. But the increase in April’s inflation reading, beyond what other analysts forecast, has some traders testing this view.
Commodities
Oil prices fell on Thursday after Colonial Pipeline said it had begun to restart operations along its massive pipeline, which transports gasoline, diesel and jet fuel from Texas to New Jersey. West Texas Intermediate, the U.S. benchmark, dropped 2.4 percent to $64.47 a barrel.
Other commodity prices have also fallen from recent highs. Iron ore futures were down 3.6 percent after climbing to a record this week. Aluminum prices fell 1.6 percent and silver prices were down 1.4 percent.
Cryptocurrencies
Bitcoin prices fell 12 percent to below $50,000, according to CoinDesk, after Elon Musk said Tesla would stop accepting the cryptocurrency as payment for its electric cars. Mr. Musk citing concerns about the energy consumption used in mining for Bitcoin, a longstanding issue. Tesla’s share price fell 1.5 percent in premarket trading.
Most other cryptocurrencies fell on Thursday with CoinMarketCap valuing the global market at $2.2 trillion, down 11 percent from the day before.
Shares in Coinbase, an exchange for people and companies to buy and sell various digital currencies, dropped 5.5 percent in premarket trading.
The operator of Colonial Pipeline said on Wednesday that it had started to resume pipeline operations but noted that “it will take several days for the product delivery supply chain to return to normal.”
The pipeline, which stretches from Texas to New Jersey, had been shut down since Friday after a ransomware attack.
“There will be lag time between Colonial Pipeline reopening and increases in fuel availability for general public,” warned an internal assessment of potential impact drawn up by the Departments of Energy and Homeland Security. It noted that the fuel “travels through the pipeline at 5 miles per hour” and would take “approximately two weeks to travel from the Gulf Coast to New York.”
The company has refused to say whether it had paid a ransom or was considering doing so. On Wednesday, administration officials said they believed the company was avoiding paying the ransom, at least for now. Instead, they said, the company was trying to reconstruct its systems with a patchwork of backed-up data.
Gasoline prices in Georgia and a few other states rose 8 to 10 cents a gallon on Wednesday alone, a jump not usually seen without a major hurricane shutting down refineries. At some stations, people were filling up gasoline cans, forcing others to wait longer and causing shouting matches. Lines of 20 to 25 cars waited at the few stations operating in Chapel Hill, N.C., where almost all the gas stations lacked fuel.
Sales of Bitcoin helped Tesla’s bottom line in the first quarter.Credit…Lam Yik Fei for The New York Times
Three months after Tesla said it would begin accepting the cryptocurrency Bitcoin as payment, the electric carmaker has abruptly reversed course.
In a message posted to Twitter on Wednesday, Elon Musk, Tesla’s chief executive, said Tesla had suspended accepting Bitcoin because of concern about the energy consumed by computers crunching the calculations that underpin the currency.
“Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at a great cost to the environment,” Mr. Musk wrote. “We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
Earlier this year, Tesla announced that it had purchased $1.5 billion worth of Bitcoin and Mr. Musk trumpeted the company’s plan to accept the currency. Tesla later sold about $300 million of its Bitcoin holdings, proceeds that padded its bottom line in the first quarter.
“Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy,” Mr. Musk wrote on Wednesday, referring to the process through which new Bitcoin is created.
The price of Bitcoin dipped slightly after the announcement, according to Coindesk.
As cryptocurrencies explode in value, the amount of energy used by the digital currencies is increasingly under scrutiny. Some estimates put the energy use of Bitcoin at more than the entire country of Argentina.
“Bitcoin uses more electricity per transaction than any other method known to mankind, and so it’s not a great climate thing,” Bill Gates said in February.
Mr. Musk also said on Wednesday that Tesla was “looking at other cryptocurrencies” that use a fraction of the energy consumed by Bitcoin. Mr. Musk has been a promoter of Dogecoin, a cryptocurrency that started as a joke but that has exploded in value. In an appearance on “Saturday Night Live” last week, Mr. Musk referred to Dogecoin as a “hustle.” Dogecoin fell by nearly a third in price on the night of the show.