U.S. jobless claims fall; producer prices post solid rise
WASHINGTON (Reuters) -The number of Americans filing claims for unemployment benefits fell again last week as the economic recovery from the COVID-19 pandemic continued but producer prices posted their largest annual increase in more than a decade amid inflation pressures.
Initial claims for state unemployment benefits fell 12,000 to a seasonally adjusted 375,000 for the week ended August 7. Data for the prior week was revised to show 2,000 more applications received than previously reported.
Economists polled by Reuters had forecast 375,000 applications for the latest week. Unadjusted claims, which offer a better read of the labor market, decreased 5,198 to 320,517 last week.
Claims remain well above their pre-pandemic level of 256,000, though they have dropped from a record 6.149 million in early April 2020.
There are still fears that rising coronavirus cases caused by the Delta variant could slow the employment recovery amid a shortage of workers. There were a record 10.1 million job openings at the end of June. About 8.7 million people are officially unemployed.
The claims report showed the number of people continuing to receive benefits after an initial week of aid fell 114,000 to 2.866 million during the week ended July 31.
The labor market recovery has a long way to go. About 12.055 million people, the same as the prior report, were receiving unemployment checks under all programs in late July, the lowest level since late March 2020.
The economy has swiftly regained momentum and past its pre-pandemic peak in the second quarter as trillions in government relief and increasing vaccinations against COVID-19 fueled spending on goods and services.
PRODUCER PRICES AT DECADE HIGH
Elsewhere, U.S. producer prices increased more than expected in June, a separate Labor Department report showed on Friday, suggesting inflation could remain high as strong demand fueled by the recovery continues to hurt supply chains.
In the 12 months through July, the PPI jumped 7.8%, a record high since the measure was introduced just over a decade ago.
The producer price index for final demand increased 1.0% last month after rising 1.0% in June. Three-quarters of the gain was driven by a record one-month increase in final demand services, while the goods advance was half what it was in June.
The report followed data on Wednesday that showed U.S. consumer prices increases slowed in July even as they remained at a 13-year high on a yearly basis amid tentative signs inflation has peaked as supply-chain disruptions caused by the pandemic work their way through the economy.
The swiftness of the economic recovery has caused a mismatch between supply and demand. Producers have had to grapple with low inventories, higher commodity prices, a global shipping container crisis and increased labor costs due to a shortage of willing workers.
The lack of inventory because of supply chain issues are making it easier for producers to pass on the costs to consumers.
Source: Read Full Article