Weekly unemployment claims drop below 1 million
End of $600 benefit may be why fewer people filed, though losses still staggering.
Charisse Jones “The expiration of the $600/week supplement ... may have made filing for benefits less attractive, leading to reduced filings.” Daniel Silver, JPMorgan Chase
The number of Americans applying for unemployment dropped last week, slipping below 1 million for the first time since the economic shutdown sparked by the coronavirus pandemic began in the spring.
The number of new applications for benefits, a rough gauge of layoffs, declined to 963,000, the Labor Department said Thursday. It was the second straight drop, from 1.2 million the previous week. And it’s the first time weekly claims have dipped below 1 million since the week ending March 14, with the figure sharply below the 1.25 million some economists expected
But while the downward slide is a welcome trend, it doesn’t mean the economy has rebounded.
“Another larger-than-expected decline in jobless claims suggests that the jobs recovery is regaining some momentum,” Oxford Economics said in a note. “But with a staggering 28 million workers still claiming some form of jobless benefits, much labor market progress remains to be done.”
The latest stream of applications is still historic, dwarfing the previous alltime weekly high of 695,000 during another economic downturn in 1982. And the latest tally means a stunning 56.2 million Americans sought unemployment aid in just 21 weeks.
Did end of $600 discourage jobless claims?
The number of claims has ebbed and flowed in recent weeks, but stubbornly remained above 1 million until now, painting a stark picture of the toll the coronavirus pandemic has taken as businesses cut staff and consumers warily watch their spending.
While the lower number of firsttime jobless claims last week may signal that more Americans are finding work or being rehired, it might also reflect fewer people applying for assistance now that an extra weekly federal benefit of $600 has ended.
“The expiration of the $600/week supplement to unemployment benefits ... at the end of July may have made filing for benefits less attractive, leading to reduced filings,” Daniel Silver of JPMorgan Chasesaid in a note.
Continuing unemployment claims shrank to 15.5 million in the week ending Aug. 1, their lowest level since the start of April, but that is still “historically high ... underscoring the painfully slow recovery in the labor market,” Oxford said.
Unemployment hits Sunbelt
Unemployment slipped to 10.2% in