Weekly jobless claims declined further last week beating Wall Street expectations, while longer-term unemployment signs also showed improvement, the Labor Department reported today. The number of Americans filing new claims for unemployment benefits fell for a fourth straight period to a new pandemic low of 348k while analysts expected a reading of 363k despite the rising number of new coronavirus cases. However, claims are still far from the 200 thousand level reported back in February. Meanwhile, continuing jobless claims, which measure unemployed people who have been receiving unemployment benefits for a longer period of time, fell to 2.82 million from 2.899 million a week before and slightly above market expectations of 2.8 million. Still both counts marked new pandemic-era lows.
Both initial jobless claims and continuing jobless claims reached the lowest level since the pandemic began. Source: Bloomberg via ZeroHedge
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Create account Try a demo Download mobile app Download mobile appAlso the number of US citizens who are receiving benefits under all programs dropped to 11.74 million, a decline of 311,787 for the week ended July 31 and owing mostly to a big drop in those receiving enhanced benefits, which will expire next month. Last year, this number stood at 28.7 million.
The total number of people receiving some kind of unemployment benefit returned below 12 million. Source: Bloomberg via ZeroHedge
Today's report reflects the period the Labor Department uses as its survey week for the monthly NFP count. With claims below 400k,payroll growth likely remained strong after the economy created a whopping 943,000 jobs in July. Today's claims numbers cast a bit of moderate optimism on the US labor market recovery. However, whether this trend will continue depends largely on the government and its approach to the spread of the Delta variant. If the authorities decide to reintroduce severe restrictions, the number of claims may start to increase again. This would in turn delay the introduction of tapering as Chair Powell underlined recently, that reduction of FED support depends on the labor market recovery.
