According to the United States Department of Labor's Jobs Report, weekly claims for unemployment benefits dropped to a new pandemic low.
Seasonally adjusted initial claims were 444,000 in the week of May 15, keeping a trend going that began earlier this month after the number fell below 500,000. Unadjusted for seasonal changes in employment, a total of 454,634 initial claims were filed.
The downward trend is a sign of relief for many, though investors appear to be particularly well relieved. The numbers seem to have pushed the market higher towards the end of last week, according to the Dow Jones Industrial Average (NYSE: DIA), Nasdaq Composite (NASDAQ: QQQ), and S&P 500 (NYSE: SPY). After spending the first few days of last week in decline, indices began to show improvement towards Thursday and Friday.
Some businesses, though, are still having trouble hiring workers despite downward movement in initial claims. The debate regarding the ongoing labor shortage has become a hotly partisan issue, with conservatives blaming the lack of workers on federal unemployment benefits, which expire on June 26. Liberals, however, question the effectiveness of putting workers back into the workforce by terminating unemployment benefits early.
There do, however, appear to be increasing signs of pressure on companies to raise wages. The increasing popularity of a higher federal minimum wage, and higher wages/salaries universally, has been spurred forward by the pandemic. Even before the pandemic raged, many hourly workers called into question the long hours and low pay of many hourly wage jobs. As a result, many businesses offering lower wages have faced a reduced labor pool.
Another labor issue exacerbated by pandemic unemployment was the issue of potential oversupply of the American market, with simply too many stores and restaurants saturating consumers with unwanted goods. As some have pointed out, the unfortunate fact of the matter is that businesses closing after failing to be competitive is simply a function of the free market, albeit an unpleasant one.