New weekly jobless claims came in slightly higher than expected but still eked out a new pandemic-era low, with the weekly rate of those rendered newly out-of-work coming closer to pre-virus levels.
The Labor Department released its jobless claims report Thursday. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:
Initial unemployment claims, week ended November 13: 268,000 vs. 260,000 expected and an upwardly revised 269,000 during prior week
Continuing claims, week ended November 5: 2.080 million vs. 2.120 million expected and an upwardly revised 2.209 million during prior week
First-time unemployment claims held below the psychologically important 300,000 level for a sixth straight week. The steady move lower in jobless claims over the past several months has underscored continued improvement in the labor market's recovery, especially on the demand side as employers look to hold onto workers.
But labor supply, however, remains tight. Near-record levels of job openings have reflected the extent of the scarcities, and the quits rate surged to an all-time high of 3.0% in September, Labor Department data showed last week. This has in turn incentivized companies to try and keep workers on their payrolls, contributing to the decline in new weekly unemployment claims.
"Labor is going to continue to be tight and we'll continue to focus on retaining our existing team," Target (TGT) Chief Operating Officer John Mulligan told analysts during the company's earnings call on Wednesday.
And at the same time, attracting workers has become more costly for many companies, with many implementing higher wages and bonuses. Both Target and Walmart (WMT) — the largest private employer in the U.S. — have cited increased labor costs in their most recent results, adding to the myriad of other companies that have also seen compensation expenses rise.
"What you saw during the quarter in the third quarter, more specifically in gross margin, were costs that came through in terms of supply chain, that would be everything from our domestic supply chains, labor [and] international supply chains as well," said John Furner, president and CEO of Walmart U.S., during the company's earnings call Tuesday.
While these labor shortages have continued for months now, many economists believe current labor dynamics will ultimately normalize as virus-related disruptions ease further and consumer savings from government stimulus earlier this year diminish. For the week ended Oct. 30, the total number of claimants across all programs was at just under 3.2 million, or far below the 20.8 million on all programs during the comparable week last year when federal augmented unemployment benefits were still in place.
"Overall, the labor market is on a gradual path of improvement. However, shortages — evident in the high level of job openings, which continue to outpace the number of unemployed individuals, — are preventing a stronger recovery," wrote Rubeela Farooqi, chief economist for High Frequency Economics, in a note.
"Our expectation remains that as the cushion from savings continues to diminish, and assuming the virus does not disrupt activity once again, supply constraints will ease," Farooqi added. "That will not only provide a boost to job growth but will also help lift participation and take pressure off wages."
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck