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U.S. factory output dips 0.1% in June on auto chip shortage

U.S. factory output dips 0.1% in June on auto chip shortage

U.S. factory output slid last month as a shortage of computer chips disrupted auto productionBy PAUL WISEMAN AP Economics WriterJuly 15, 2021, 9:32 PM• 2 min readShare to FacebookShare to TwitterEmail this articleWASHINGTON — U.S. factory output slid last month as a shortage of computer chips disrupted auto production.Manufacturing production dipped 0.1% in June — third drop in five months, the Federal Reserve reported Thursday.Overall, industrial production — including output at factories, mines and utilities — rose 0.4% last month after increasing 0.7% in May. Industrial output is up 9.8% from a year earlier.The chip shortage pushed production of cars, trucks and auto parts down 6.6% in June. Excluding autos, industrial production rose 0.4% last month.“The manufacturing sector continues to be hobbled by supply constraints,” said Stephen Stanley, chief economist at Amherst Pierpont Securities. “The highest profile example is the struggle by automakers to manage through a chip shortage.”Utility output climbed 2.7% in June as Americans cranked up the air conditioning to battle a heat wave across much of the country. Mining output rose 1.4% on an uptick in oil and gas production.American industry has been bustling as the coronavirus threat recedes, despite a shortage of workers and trouble getting supplies in time. The Institute for Supply Management, an association of purchasing managers, reported that its manufacturing ticked slightly lower last month compared to May.But it still came in at 60.6 on a scale where anything above 50 signals growth. Still, factory hiring shrank, ISM found, largely because manufacturers are struggling to fill job openings as the economy rebounds with unexpected speed from the coronavirus recession.

U.S. factory output dips 0.1% in June on auto chip shortage

U.S. factory output dips 0.1% in June on auto chip shortage

U.S. factory output slid last month as a shortage of computer chips disrupted auto productionBy PAUL WISEMAN AP Economics WriterJuly 15, 2021, 5:03 PM• 2 min readShare to FacebookShare to TwitterEmail this articleWASHINGTON — U.S. factory output slid last month as a shortage of computer chips disrupted auto production.Manufacturing production dipped 0.1% in June — third drop in five months, the Federal Reserve reported Thursday.Overall, industrial prdouction — including output at factories, mines and utilities — rose 0.4% last month after increasing 0.7% in May. Industrial output is up 9.8% from a year earlier.The chip shortage pushed production of cars, trucks and auto parts down 6.6% in June. Excluding autos, industrial production rose 0.4% last month.“The manufacturing sector continues to be hobbled by supply constraints,” said Stephen Stanley, chief economist at Amherst Pierpont Securities. “The highest profile example is the struggle by automakers to manage through a chip shortage.”Utility output climbed 2.7% in June as Americans cranked up the air conditioning to battle a heat wave across much of the country. Mining output rose 1.4% on an uptick in oil and gas production.American industry has been bustling as the coronavirus threat recedes, despite a shortage of workers and trouble getting supplies in time. The Institute for Supply Management, an association of purchasing managers, reported that its manufacturing ticked slightly lower last month compared to May. But it still came in at 60.6 on a scale where anything above 50 signals growth. Still, factory hiring shrank, ISM found, largely because manufacturers are struggling to fill job openings as the economy rebounds with unexpected speed from the coronavirus recession.

US unemployment claims fall to 360,000, a new pandemic low

US unemployment claims fall to 360,000, a new pandemic low

The number of Americans applying for unemployment benefits has reached its lowest level since the pandemic struck last year, further evidence that the U.S. economy and job market are quickly rebounding from the pandemic recessionBy PAUL WISEMAN AP Economics WriterJuly 15, 2021, 2:51 PM• 3 min readShare to FacebookShare to TwitterEmail this articleWASHINGTON — The number of Americans applying for unemployment benefits has reached its lowest level since the pandemic struck last year, further evidence that the U.S. economy and job market are quickly rebounding from the pandemic recession.Thursday’s report from the Labor Department showed that jobless claims fell by 26,000 last week to 360,000. The weekly tally, a proxy for layoffs, has fallen more or less steadily since topping 900,000 in early January.The U.S. recovery from the recession is proceeding so quickly that many forecasters have predicted that the economy will expand this year by roughly 7%. That would be the most robust calendar-year growth since 1984.The rollout of COVID-19 vaccines has sharply reduced new viral cases — from a seven-day average of around 250,000 in early January to roughly 25,000 recently — despite a recent uptick. As the health crisis has receded, cooped-up Americans have increasingly emerged from their homes, eager to spend on things they had missed during pandemic lockdowns — dinners out, a round of drinks, sports and entertainment events, vacation getaways and shopping trips.In response, businesses have scrambled to meet the unexpected surge in customer demand: They are posting job openings — a record 9.2 million in May — faster than they can fill them. The worker shortage in many industries is causing employers to raise wages and in some cases to raise prices to offset their higher labor costs.The supply of potential hires is being held back by a variety of factors. Many Americans still have health concerns about working around large numbers of people. Many people, mostly women, are no longer working or looking for work because they had to care for children when schools and day care centers shut down. And roughly 2.6 million older workers took advantage of enlarged stock portfolios and home values to retire early.A temporary $300-a-week federal unemployment benefit, on top of regular state jobless aid, may be enabling some people to be more selective in looking for and taking jobs. Roughly half the states plan to stop paying the supplement by the end of July in what proponents say is an effort to nudge more of the unemployed to seek jobs.“As life normalizes and the service sector continues to gain momentum, we expect initial jobless claims to remain in a downtrend,″ said Joshua Shapiro, chief U.S. economist at the consulting firm Maria Fiorini Ramirez.Last month, employers added a hefty 850,000 jobs, and hourly pay rose a solid 3.6% compared with a year ago — faster than the pre-pandemic annual pace and evidence that companies are being compelled to pay more to attract and keep workers. Even so, the United States remains about 6.8 million jobs short of the number it had in February 2020, just before the virus erupted across the country and paralyzed the economy.And weekly applications for unemployment benefits remain high by historical standards: Just before the pandemic, they amounted to about 220,000 a week. All told, 13.8 million Americans were receiving some type of unemployment aid during the week of June 26, down from 30.6 million a year earlier.

US jobless claims tick up to 373,000 from a pandemic low

US jobless claims tick up to 373,000 from a pandemic low

The number of Americans filing for unemployment benefits rose slightly last week even while the economy and the job market appear to be rebounding from the coronavirus recession with sustained energyBy PAUL WISEMAN AP Economics WriterJuly 8, 2021, 1:19 PM• 3 min readShare to FacebookShare to TwitterEmail this articleWASHINGTON — The number of Americans filing for unemployment benefits rose slightly last week even while the economy and the job market appear to be rebounding from the coronavirus recession with sustained energy.Thursday’s report from the Labor Department showed that jobless claims increased by 2,000 from the previous week to 373,000. Weekly applications, which generally track the pace of layoffs, have fallen steadily this year from more than 900,000 at the start of the year. The four-week average of applications, which smooths out week-to-week volatility, is now 394,500 — the lowest such level since the pandemic erupted in March of last year.The rollout of vaccinations is driving a potent economic recovery as businesses reopen, employers struggle to fill jobs and consumers emerge from months of lockdown to travel, shop and spend at restaurants, bars, retailers and entertainment venues.In the first three months of the year, the government has estimated that the economy expanded at a brisk 6.4% annual rate. In the April-June quarter, the annual rate is thought to have reached a sizzling 10%. And for all of 2021, the Congressional Budget Office has projected that growth will amount to 6.7%. That would be the fastest calendar-year expansion since 1984.The economy is recovering so quickly that many companies can’t find workers fast enough to meet their increased customer demand. On Wednesday, the government said that U.S. employers posted 9.21 million jobs in May, the most since record-keeping began in 2000.And in June, employers added a strong 850,000 jobs, and hourly pay rose a solid 3.6% compared with a year ago — faster than the pre-pandemic annual pace and a sign that companies are being compelled to pay more to attract and keep workers.Still, the nation remains 6.8 million jobs short of the level it had in February 2020, just before the coronavirus pandemic tore through the economy and eliminated tens of millions of jobs. And weekly applications for unemployment benefits, though down sharply from earlier peaks, are still comparatively high: Before the pandemic, they were typically coming in at only around 220,000 a week.The total number of Americans receiving jobless aid, including supplemental federal checks that were intended to provide relief during the pandemic recession, amounted to 14.2 million people during the week of June 19, down from 33.2 million a year earlier.Many states, though, have dropped the federal aid, responding to complaints that the generous benefits were discouraging some of the unemployed from seeking work: A total of 26 states plan to end the $300-a-week federal benefit before it ends nationally on Sept. 6. Most of those states will also cut off federal assistance to the self-employed, gig workers and people who have been out of work for more than six months.Still, many factors other than the enhanced federal jobless benefits are thought to have contributed to the shortage of people seeking work again: Difficulty arranging or affording child care, lingering fears of COVID-19, early retirements by older workers, a slowdown in immigration and a decision by some people to seek new careers rather than return to their old jobs.“We see weekly filings declining over coming weeks as job growth picks up, although at least some of the improvement will be due to states suspending federal support measures,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said in a research note.———AP Economics Writer Christopher Rugaber contributed to this report.

EXPLAINER: 5 key takeaways from the June jobs report

WASHINGTON — The U.S. job market is storming into summer. Job creation and wages rose sharply in June. And more and more Americans are confident enough to quit their jobs and look for a better one.In the strongest gain since August, employers added 850,000 jobs last month. And average wages rose a healthy 3.6% from a year earlier, a sign that businesses need workers so badly they’re willing to ramp up pay.The June jobs report did contain one conspicuous blemish: The unemployment rate actually ticked up last month. But many economists wrote that off as a technical blip.With vaccinations still increasing, the number of new COVID-19 cases has plummeted to an average below 12,000 a day — down dramatically from around 250,000 in early January. The brightening health picture has allowed businesses to increasingly reopen and has encouraged formerly cooped-up consumers to rush out to restaurants, shops and entertainment venues and to book vacation flights.As employers post job openings at a record pace, they’re complaining that they can’t find enough workers to fill jobs. Economists expect the supply of workers to gradually catch up with demand. Some Americans are delaying their job search owing to lingering health concerns, difficulty making child care arrangements or generous, though temporary, federal unemployment benefits. Others have decided to retire early or train for new careers.The economy remains 6.8 million short of the number of jobs it had in February 2020, just before COVID-19 flattened the economy.“It’s only a question of time before hiring catches up with buoyant labor demand,” said Lydia Boussour, senior U.S. economist at Oxford Economics. “The economy is set for a jobs boom in the coming months as labor supply constraints gradually dissipate.”Boussour said she foresees job growth exceeding 1 million a month over the summer.“Let the employment fireworks begin,’’ she wrote in a research note.Here are five takeaways from the June jobs report:———TWO SURVEYS, TWO STORIESThe 850,000 jobs that employers added last month were a pleasant surprise. Economists had predicted about 675,000. Yet the unemployment rate ticked up from 5.8% to 5.9%. And the number of people who reported being employed actually dropped by 18,000.What gives?The contradictory numbers reflect the way the Labor Department compiles the monthly jobs report — with two surveys. The two surveys sometimes tell different stories, as they did in June. But the differences tend to even out over time.One survey asks businesses how many people they employed during the month; this determines the number of jobs gained or lost.The other survey asks households whether the adults living there have a job. Those who don’t have one but are looking count as unemployed; those who aren’t looking for work do not. This survey determines the unemployment rate.The household survey, unlike the survey of businesses, counts farm workers, the self-employed and people who work at start-ups. It also does a better job of counting small-business jobs.But the survey of businesses uses a larger sample size and is considered more precise: The Labor Department surveys 145,000 companies and government agencies, compared with just 60,000 households.Economists also suspect that technical factors might have thrown off the household survey in June. Brian Coulton, chief economist at Fitch Ratings, for example, says the drop in employed Americans might be explained by “the challenges of seasonal adjustment after’’ huge job losses in the spring of 2020.———MOVING ONA hot labor market, and perhaps a rethinking of personal priorities after COVID-19, has led many Americans to leave their jobs and look for higher-paying or more satisfying work elsewhere. In June, 942,000 people were unemployed because they voluntarily left their old employer. That was up 21% from 778,000 in May, and it’s the highest such monthly figure since 2016.“Workers clearly know that they are in the driver’s seat right now, and many appear willing to walk away from their current position before they have even a new job lined up,” says Stephen Stanley, chief economist at Amherst Pierpont Securities.In an earlier report, the Labor Department had reported that 4 million workers quit their jobs in April. That was the highest such figure on records dating to 2000.———MUDDLED NUMBERSThe wild swings in the job market — from an epic collapse in the spring of 2020 as the coronavirus triggered devastating layoffs, to a vigorous rebound over the past year — have created confusion in the way the Labor Department calculates its numbers and adjusts them for seasonal fluctuations.For example, the department reported a sharp increase last month in jobs in local (up 155,000), state (up 75,000) and private (39,000) education as schools reopened. But those job gains might have been exaggerated, the department conceded, because the bumpy switch from remote to in-person learning has “distorted the normal seasonal buildup and layoff patterns.’’Likewise, Joshua Shapiro, chief U.S. economist at the consulting firm Maria Fiorini Ramirez Inc., cautions that a surprising and seemingly unhealthy drop in weekly hours worked at private companies likely reflects the difficulty of accounting for people who work from home.“With most who are able to work remotely still doing so at least part of the time,” Shapiro writes, “the reliability of these data are likely compromised to some degree.”———HIGHER UNEMPLOYMENT FOR ALL RACESThe unemployment rate rose 0.1 percentage point last month for Black, Hispanic and white workers alike. The jobless rates are now 5.2% for whites, 7.4% for Hispanics and 9.2% for Black Americans.Despite steady job growth, lingering damage from the coronavirus recession is still taking a toll on Americans of all races: Nearly 6.5 million whites were unemployed in June, up 2.6 million, or 67%, from February 2020, just before the virus struck. Over the same period, the number of unemployed is up 53% to 1.9 million for African Americans and 65% to 2.2 million for Hispanics.———BACK TO THE CUBICLEAs the virus recedes and businesses reopen, Americans are increasingly packing up their laptops, leaving makeshift offices in the kitchen and trudging back to their old places of work.The Labor Department reported that the proportion of people who are teleworking dropped to 14.4% in June — down from 16.6% in May and a peak of 35.4% in May 2020. (The figures include anyone who worked remotely at any point in the previous four weeks.)Companies that operate out of downtown office buildings and restaurants that cater to weekday commuters are nervously waiting to see whether — or to what extent — the work-from-home trend sticks once economic life returns to normal after COVID-19. Many companies have already told their employees to expect a hybrid system in which they could work from home on certain days of the week.

US jobless claims fall to 364,000, a new pandemic low

US jobless claims fall to 364,000, a new pandemic low

The number of Americans applying for unemployment aid fell again last week to the lowest level since the pandemic struck last year, further evidence that the job market and the broader economy are rebounding rapidly from the coronavirus recessionBy PAUL WISEMAN AP Economics WriterJuly 1, 2021, 1:09 PM• 4 min readShare to FacebookShare to TwitterEmail this articleWASHINGTON — The number of Americans applying for unemployment aid fell again last week to the lowest level since the pandemic struck last year, further evidence that the job market and the broader economy are rebounding rapidly from the coronavirus recession.The Labor Department reported Thursday that jobless claims dropped by 51,000 to 364,000. Applications for unemployment benefits have fallen more or less steadily since the year began. The rollout of vaccines has sharply reduced new COVID-19 cases, giving consumers the confidence to shop, travel, eat out and attend public events as the economy recovers.Last week’s drop in jobless claims was steeper than economists had expected. Applications for unemployment benefits have now fallen in 10 of the past 12 weeks.”As life normalizes and the service sector continues to gain momentum, we expect initial jobless claims to remain in a downtrend,” said Joshua Shapiro, chief U.S. economist at the consulting firm Maria Fiorini Ramirez.All that pent-up spending has generated such demand for workers, notably at restaurants and tourism businesses, that many employers have been struggling to fill jobs just as the number of posted openings has reached a record high. But many economists expect hiring to catch up with demand in the coming months, especially as federal unemployment aid programs end and more people pursue jobs.On Friday, according to the data provider FactSet, the government is expected to report that employers added 675,000 jobs in June. That would be a substantial number but still not at a pace that would allow the economy to quickly regain its pre-pandemic level of employment. The job market remains nearly 7 million jobs short of that level.Some businesses have complained that expanded federal aid to the unemployed — especially a $300-a-week supplemental benefit, intended to cushion the economic blow from the pandemic — has discouraged some people from looking for a job.But other factors, too, are believed to have contributed to the shortage of people seeking work again: Difficulty arranging or affording child care, lingering fears of COVID-19, early retirements by older workers, a slowdown in immigration and a decision by some people to seek new careers rather than return to their old jobs.Responding to the criticism about the duration of expanded jobless benefits, dozens of states began dropping the expanded federal aid starting last month: Roughly half the states will end the $300 payments. Most of those will also cut off unemployment assistance to the self-employed, gig workers and people who have been out of work for more than six months. Nationally, the $300-a-week federal benefit will end Sept. 6.The data firm Homebase reported that employment has actually grown more slowly in the states that had dropped the federal benefits than in those that kept it.The job market’s improvement comes against the backdrop of a fast-rebounding economy. Growth for the just-ended April-June quarter is believed to have reached an annual pace of roughly 10%. And according to an index produced by the Conference Board, a private research group, consumer confidence nearly regained its pre-pandemic level in May.With consumers feeling more confident about spending, the rate of jobless claims, which generally reflects the pace of layoffs, has dwindled over the past several months. The weekly figure had topped 900,000 back in January, when the economy was still struggling to emerge from the recession and employers were retrenching.Despite the significant improvement since then, claims remain high by historic standards. Before the pandemic flattened the economy in March 2020, the weekly figure typically numbered around 220,000.All told, 3.47 million people were receiving traditional state unemployment benefits in the week of June 19, up from 3.41 million a week earlier. If you include the federal benefits, 14.7 million were receiving some type of unemployment assistance during the week of June 12, down from 32.1 million a year earlier.————AP Economics Writer Christopher Rugaber contributed to this report.

US jobless claims tick up to 412,000 from a pandemic low

US jobless claims tick up to 412,000 from a pandemic low

The number of Americans applying for unemployment benefits rose last week for the first time since April despite widespread evidence that the economy and the job market are rebounding steadily from the pandemic recessionBy PAUL WISEMAN AP Economics WriterJune 17, 2021, 1:02 PM• 3 min readShare to FacebookShare to TwitterEmail this articleWASHINGTON — The number of Americans applying for unemployment benefits rose last week for the first time since April despite widespread evidence that the economy and the job market are rebounding steadily from the pandemic recession.The Labor Department said Thursday that jobless claims rose 37,000 from the week before to 412,000. As the job market has strengthened, the number of weekly applications for unemployment aid has fallen for most of the year. The number of jobless claims generally reflects the pace of layoffs.Weekly applications for unemployment aid had dropped for six straight weeks, and economists had expected another dip last week. Still, the report showed the the four-week average of claims, which smooths out week-to-week ups and downs, fell by 8,000 last week to 395,000 — the lowest four-week average since the pandemic slammed the economy in March 2020.For jobless claims to rise slightly “should not be cause for concern yet,” said AnnElizabeth Konkel, economist at the Indeed Hiring Lab.“The big picture is that while we are not back to a ‘normal’ level yet of initial claims, they are no longer astronomically high.”A year ago, nearly 1.5 million people had applied for unemployment benefits in one week.With vaccinations up and more consumers venturing out to spend — on restaurant meals, airline fares, movie tickets and store purchases — the economy is rapidly recovering from the recession. All that renewed spending has fueled customer demand and led many companies to seek new workers, often at higher wages, and avoid layoffs.In fact, the speed of the rebound from the recession has caught many businesses off guard and touched off a scramble to hire. In May, employers added a less-than-expected 559,000 jobs, evidence that many companies are struggling to find enough workers as the economy recovers faster than expected.But many economists expect hiring to catch up with demand in the coming months, especially as federal unemployment aid programs end and more people pursue jobs. They note that the economy still has 7.6 million fewer jobs than it did before the pandemic struck.And employers are posting job openings faster than applicants can fill them. In April, they advertised a record 9.3 million job openings, up a sharp 12% from the number in March.The rapid rollout of vaccines has brought the number of new confirmed COVID-19 cases down to an average of just over 12,000, from around 250,000 a day in early January.Though jobless claims have tumbled since the start of 2021, when they exceeded 900,000, they remain high by historical standards. Before the pandemic paralyzed the economy in March 2020, unemployment applications were running at about 220,000 a week.In Thursday’s report, the government said a total of 3.5 million Americans were continuing to collect traditional state unemployment benefits in the week ending June 5, up by just 1,000 from the week before.Many Americans are contending with health and child care issues related to COVID-19 and with career uncertainty after the recession wiped out many jobs for good. Some who have lost work during the pandemic have decided to retire. Others are taking their time looking for work because, in some cases, supplemental federal jobless benefits, on top of regular state unemployment aid, pay them more than their old jobs did.Many states, though, are set to begin dropping the supplemental federal jobless aid this month.Including the federal benefits, 14.8 million people were receiving some type of jobless aid during the week of May 29, down nearly 560,000 from the week before and from 30.2 million a year earlier.

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