It was the lowest number of weekly initial claims since mid-March, then the pandemic shuts down the US economy.
For 20 straight weeks, the number of people filing for first-time unemployment consistently reached more than 1 million, reaching almost 7 million at the end of March.
While the decline is a positive sign, the numbers are still historically high. In the same week a year ago, 218,000 people submitted for initial benefits.
Even during the Great Recession just over a decade ago, unemployment claims were not as high as in the current crisis.
Another lesson from the Great Recession: it took almost five years – from its peak in 2009 to 2014 – for claims to return to where they were before the financial crisis.
Even though last week’s headline number is an improvement, it does not cover the claims for assistance for pandemic unemployment, a program created by Congress following the hit of Covid-19. Those added cumulative claims for the first time add over a million, to 1.3 million on an unadjusted basis.
That said, economists say it is encouraging that unemployment claims are declining because it means people are moving on to work.
Unemployment claims, which count people who have submitted at least two weeks in a row for unemployment benefits, stood at $ 15.5 million on a seasonally adjusted basis. Without the adjustment, the number was 15.2 million.
Counting all the state’s unemployment programs, 28.3 million people were required in the week ending July 25, some form of assistance.
“The reality is that millions of people have lost their jobs,” said AnnElizabeth Konkel, an economist at the India Hiring Lab. “These people are faced with assembly costs, and struggling to find work. The expiration of the extended $ 600 federal unemployment benefit has only reflected the difficult situation they are in.
“Meanwhile, the source of all this economic hardship, the coronavirus, remains unchecked,” she added.
– Tami Luhby contributed to this report.
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