The number of individuals filing new unemployment claims is expected to fall below the 1 million mark for a second straight week last week, reflecting an ever-increasing but somewhat improving level of unemployment in the US economy.
The Department of Labor is set to release its report on weekly unemployment insurance claims Thursday at 8:30 p.m. ET. Here are the key metrics expected from the report, compared to consensus estimates compiled by Bloomberg as of Wednesday morning:
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Begin of the unemployed, week ended August 15: 920,000 expected vs. 963,000 in the previous week
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Continued claims, week ended August 8: 15 million expected vs. 15,486 million in the previous week
If results come in as expected, it would mark the third straight week of declines in the level of new jobless claims, after back-to-back weeks of increases in mid-July. Nearly every state reported declines in new claims on an unadjusted basis in the August 8 Unemployment Claims Report, with even those states in the South and West that had recently struggled with a rise in new cases of coronavirus and business re-closures reported improvements.
At 920,000, new unemployment rates would be at their lowest level since the escalation of the pandemic in the US in March. But as a result, the pre-pandemic record high of 665,000 from March 2009 would still top, reflecting another close to millions of people newly submitted for unemployment insurance, as the coronavirus pandemic continues to limit companies large and small in the country. And for the coronavirus, new weekly unemployment claims were consistently below 250,000.
Continued unemployment claims, reported over a one-week delay, are also expected to have improved for the week ended August 8th. At 15 million, the level of persistent unemployment claims would also be at its lowest level since the start of the pandemic, but well above the less than 1.8 million persistent claims filed per week in the months leading up to the pandemic.
A temporary job search agency is set to open in Southwest Detroit, Michigan, on April 3, 2009. U.S. unemployment rose last month to 8.5%, a 25-year high, as employers cut 663,000 jobs and the hours of workers cut to the lowest level on record, the government said on Friday. REUTERS / Rebecca Cook (STATE POLICY)
Importantly, Thursday’s Unemployment Claims Report will mark the first after the Small Business Association’s Paycheck Protection Program (PPP) stopped accepting applications on August 8th. The program had been a major source of support for many small businesses in assisting employees on their payrolls during the pandemic period.
The report will also earn one of the first few after the end of July in improved federal benefits for unemployment insurance, which were previously set at $ 600 per week. President Donald Trump recently authorized a $ 300-a-week federal incentive in unemployment benefits through executive action, though the program has so far only been approved in a handful of states, and could raise funds within weeks.
“Trump’s executive actions did not include PPP and, with Congress remaining gridlocked at phase four. [of discussions for another stimulus package], failure to expand support remains a downside risk to the labor market in August, ”Nomura economist Lewis Alexander said in a note Friday.
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