Unemployment benefits claims down last week in Washington and nationally. Labor shortages remain a major problem.

Claims for unemployment benefits fell again last week, both here in Washington and across the nation. The state Employment Security Department reports,

During the week of August 22 to 28, there were 5,073 initial regular unemployment claims, down 5.3 percent from the prior week. Total claims filed by Washingtonians for all unemployment benefit categories numbered 272,845, down 1.0 percent from the prior week.  

  • Initial regular claims applications are 72 percent below weekly new claims applications for the same period last year during the pandemic.
  • The 4-week moving average for regular initial claims was 5,345, an increase of 39 from the previous week’s 4-week moving average. During the same time in 2019, it was 5,024.
  • Decreases in layoffs in health care and social assistance, wholesale trade and retail trade contributed to a decrease of 284 regular initial claims over the previous week.
  • There was a decrease in the combined total of initial claims and continued or ongoing claims for all benefits—which include regular unemployment insurance, Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC).
  • Federal pandemic benefits programs, including PUA and PEUC as well as the additional $300 per week, are set to expire the week ending Sept. 4, 2021.

The U.S. Department of Labor reports,

In the week ending August 28, the advance figure for seasonally adjusted initial claims was 340,000, a decrease of 14,000 from the previous week’s revised level. This is the lowest level for initial claims since March 14, 2020 when it was 256,000. The previous week’s level was revised up by 1,000 from 353,000 to 354,000. The 4-week moving average was 355,000, a decrease of 11,750 from the previous week’s revised average. This is the lowest level for this average since March 14, 2020 when it was 225,500. The previous week’s average was revised up by 250 from 366,500 to 366,750.

The advance seasonally adjusted insured unemployment rate was 2.0 percent for the week ending August 21, a decrease of 0.1 percentage point from the previous week’s unrevised rate.

The advance number for seasonally adjusted insured unemployment during the week ending August 21 was 2,748,000, a decrease of 160,000 from the previous week’s revised level. This is the lowest level for insured unemployment since March 14, 2020 when it was 1,770,000.

Clearly good news, but employers continue to contend with labor shortages. The Seattle Times has an excellent report on the challenges faced by the restaurant industry. We recommend reading the full article. This stood out:

Anthony Anton, CEO of the Washington Hospitality Association, says the labor shortage is one of the main forces making restaurant work difficult right now. 

With restaurants reopening, the demand for restaurant labor is as high as it was before the pandemic, Anton says. But the leisure and hospitality industry, of which food service is the largest component, was down 69,000 jobs in June compared with January 2020, almost double the losses seen in any other industry, according to the state Department of Commerce. And as of the second week of August, over 23,000 people in the industry were still claiming unemployment benefits in Washington, according to the state’s Employment Security Department. 

As noted above, federal pandemic unemployment benefits end September 4. Yet,

Anton is telling members of his association not to count on cooks and servers coming back to work when benefits end. Even if every single hospitality worker currently claiming unemployment benefits returned to Washington’s hospitality workforce, the industry would still be short nearly 50,000 workers, many of whom Anton says left for other industries or retired during the pandemic.

The AP reports,

“The expectation remains that labor supply shortages will ease over coming months as benefits end and schools reopen,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics, wrote in a research note. “Even so, health risks, which could influence decisions regarding return-to-work arrangements and school re-openings, could be a constraint for the labor market going forward.”

Still a rough road ahead.