American unemployment claims fall below a million
THE number of Americans filing a new claim for unemployment benefits dropped below a million for the second time since the start of the pandemic.
Initial claims for state unemployment benefits fell 130,000 to a seasonally adjusted 881,000 for the week ending Aug 29, according to figures from the US Labor Department.
However, Nancy Vanden Houten of Oxford Economics said the fall was due more to a change in how the department seasonally adjusted its data than an improvement in the labour market. Non-seasonally adjusted claims increased by 151,674 to 759,482 people from the week before.
“The data show that layoffs remain widespread and the recovery in the labour market is occurring at a frustratingly slow pace,” she said. “Seasonally adjusted or not, a lot of people are still out of work.”
Unemployment filings peaked in March as businesses shut down to stop the spread of the virus but have declined since. The number of claims is gradually returning to pre-pandemic levels but is still much higher than in any week of the global financial crisis. A total of 29.2m people were on the dole in the week to Aug 15, the latest data available – an increase of 2.2m.
“While Wall Street hits record highs, much of Main Street remains in severe distress,” Ron Temple at Lazard Asset Management said. “The pandemic and the federal failure to sustain necessary assistance to households as well as state and local governments are weakening long-term economic growth and social stability in the US.”
After the $600 (£452) weekly unemployment supplement expired in July, Donald Trump signed an executive order including a provision extending it at a reduced rate of $400.
However, state governors have said dealing with the pandemic has left them without the means to cover the $100 of the benefits they are obliged to contribute.
Looking ahead, Andrew Hunter of Capital Economics said today’s jobs report was likely to show that employment continued to rebound last month.
However weak demand in sectors such as leisure and hospitality meant “the labour market recovery is likely to remain relatively underwhelming”.