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Jobless claims drop to 1.2 million

Jobless claims drop to 1.2 million
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A seasonally adjusted 1.2 million new people applied for unemployment benefits in the week ending Aug. 1, a marked drop from the 1.4 million in the previous two weeks.

While this was the 20th week in a row that the Labor Department reported more than 1 million claims — a pandemic-driven phenomenon that had never occurred before — the figures are a welcome change from the previous week.

The Labor Department reported 1,186,000 new claims, the lowest number of weekly claims since the economy was hit. Last week, 1,435,000 had filed for weekly claims, the first increase in months as states reimposed COVID-19 restrictions.

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The new report beat economists' expectations, which had pegged another week of 1.4 million claims.

More strikingly, the unadjusted data showed an 18.5 percent drop in new claims, falling to 984,192. Some economists say the typical seasonal adjustments, which usually smooth out the data over the year, have played a distortionary role during the pandemic's historically deep downturn.

Similarly, the number of people applying for expanded Pandemic Unemployment Assistance fell to 655,707 from 908,800, a whopping 28 percent drop.

But the figures remained dire. Through July 18, the Labor Department report said 31.3 million Americans remained on the jobless rolls.

Friday's monthly jobs report, a snapshot of the economy in mid-July, will give a deeper accounting of the unemployment situation.

The figures come as Congress struggles to reach an agreement on expanded unemployment insurance.

Democrats have been pushing to extend the $600 in additional weekly benefits that expired last week, an amount Republicans say is too high and discourages people from returning to work.

Updated at 8:51 a.m.