Away from California, there were increases in claims related to the idling of assembly plants in some states by some automakers as they try to manage their supply of semiconductors amid a global shortage. A resurgence in Covid-19 infections, driven by the Delta variant, also disrupted activity in the high-contact services sector.
That suggested some moderation in labour market conditions. A separate report on Thursday from global outplacement firm Challenger, Gray & Christmas showed job cuts announced by U.S.-based employers increased 14 per cent to 17,895 in September. Still, layoffs were down 85 per cent compared to September 2020.
In the third quarter, employers announced 52,560 job cuts, the fewest since the second quarter of 1997 and down 23 per cent from the July-September period.
Layoffs last month were led by companies in the healthcare/products sector, with 2,673 announced cuts. Since the Pfizer vaccine received full-FDA approval, many health care facilities have implemented vaccine mandates.
"Healthcare is facing an enormous talent shortage," said Andrew Challenger, senior vice president at Challenger, Gray & Christmas. "Other systems are facing walk-outs or firings of unvaccinated staff, further broadening the worker shortage. In some cases, a lack of staff leads to the closing of entire units causing involuntary job loss."
Ongoing strains in the supply chain are hurting the labor market. Industrial goods manufacturers announced 2,328 layoffs in September, while warehousing businesses planned 1,936 job cuts. There were 1,679 job cuts announced in the services sector.
But the rise in layoffs was dwarfed by an explosion in planned hiring, in part as retailers gear up for the holiday season. The Challenger report showed companies announced plans to hire 939,790 workers compared to only 94,004 in August.
That bodes well for September's employment report due on Friday. According to a Reuters survey of economists, nonfarm payrolls likely rose by 500,000 jobs last month. Estimates range from as high as 700,000 jobs to as low as 250,000. The economy created 235,000 jobs in August, the fewest in seven months.
The unemployment rate is forecast dipping to 5.1 per cent from 5.2 per cent in August. But labour market indicators were mixed in September. A survey from the Conference Board last week showed consumers' views of current labour market conditions softened.
The Institute for Supply Management's measure of manufacturing employment rebounded last month after contracting in August. But the ISM's gauge of services industry employment slipped, with businesses reporting that "labour shortages (were) experienced at all levels."
The pandemic forced some people to drop out of work to become caregivers. Others are reluctant to return for fear of contracting the coronavirus, while some have either retired or are seeking career changes. There were a record 10.9 million job openings at the end of July.
Economists are cautiously optimistic that the labour shortage will start easing in the fall and through winter after last month's expiration of the expanded unemployment benefits.
They will also be keeping an eye on vaccine mandates amid reports that thousands of workers could be fired for refusing to get inoculated. President Joe Biden last month announced new rules requiring vaccination at many private workplaces.
"The mandate is working," said Chris Low, chief economist at FHN Financial in New York. "The vaccination rate has accelerated in recent weeks. If a higher vaccination rate holds Covid infection rates lower in future and participation rises as a result, faster job growth may be possible next year."