Jobless claims fall by 14,000
New applications for jobless benefits fell slightly in the last week of July, the Labor Department reported Thursday, declining for the second straight week.
Initial weekly claims for unemployment insurance dropped by 14,000 to 385,000 in the week ending July 31, falling from a revised total of 399,000 claims in the prior week. Initial jobless claims fell by 45,000 during the last two weeks of July as roughly half of U.S. states pulled out of expanded unemployment aid that month in a bid to kickstart hiring.
Even so, jobless claims still remain above the post-lockdown low set at 360,000 during the first week of July, though some of the mid-month surge may have been attributable to fraud or processing errors. Claims totaled 225,000 on March 14, 2020, the last week before COVID-19 triggered lockdowns that derailed the economy.
Another 94,476 Americans applied for Pandemic Unemployment Assistance, a program expanding jobless aid to gig workers, contractors and others who don’t qualify for unemployment insurance. That program is set to lapse in September along with a slate of other federal jobless aid programs, including the $300 weekly boost and additional weeks of aid.
The number of Americans on some form of unemployment insurance also dropped to 12.9 million, roughly a third of 32 million who were jobless benefits at the same time one year ago.
While the U.S. has gained an increasing number of jobs for three consecutive months, the lack of a steeper decline in jobless claims has raised questions among experts. Surging cases of COVID-19 among unvaccinated people also emerged as a potential threat to the labor market in July but has not appeared to make a considerable impact on unemployment.
“Weekly jobless claims dropped a bit, though they are still stubbornly around the 400,000 mark. The good news is that the latest week’s data was the first in the thick of rising Delta variant COVID-19 cases, and so far that rise in infections hasn’t pushed up layoffs,” said Robert Frick, corporate economist at Navy Federal Credit Union, in a Thursday analysis.
The new jobless claims data also comes a day before the Labor Department releases the July jobs report. Economists have projected a consensus gain of around 850,000 jobs, but it remains unclear how the emergence of the delta variant will affect the report.
Updated at 9:33 a.m.
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