A worker disinfects a bar at a nightclub in Columbia, South Carolina.
Photographer: Micah Green / Bloomberg
Photographer: Micah Green / Bloomberg
The number of Americans claiming stateless benefits fell for the first time since 1 million since the pandemic began in March, suggesting that the economic recovery is gaining some traction amid a slowdown in coronavirus infections.
Initial unemployment claims in regular state programs fell by 228,000 to 963,000 in the week ended August 8th. Continued claims – the total number of Americans claiming continued benefits in state programs – dropped to 15.5 million in the week ending August 1, the lowest since early April.
Read more: Bloomberg’s TOPLive blog about jobless claims data
Economists expected initial claims of 1.1 million and ongoing claims of 15.8 million, based on median estimates. Both figures remain well above the heights reached during the recent economic downturn.
The larger-than-expected drops in claims follow a ebb in new cases of coronavirus, underscoring the importance of managing the virus for an economy that in most respects remains well below pre-crisis measures. The decline potentially supports the argument by some companies and Republicans that the $ 600 additional weekly unemployment benefit – which expired in July – kept people from returning to work. That could reduce the pressure on the White House and lawmakers to vote on a new incentive package.
At the same time, other high-frequency indicators, such as credit card spending, show a slow or steady economic rebound. With unemployment in July above 10%, the labor market still faces challenges, including a high level of virus cases and widespread business closures and bankruptcies, such as online learning that forces Americans to care for their children at home.
‘It’s clear that the pace of lay offs is starting to slow down, but there are still an enormous number of people applying for unemployment insurance benefits, ”said Ryan Sweet, head of monetary policy research at Moody’s Analytics. “One concern for both the labor market and the wider economy is the lack of urgency in passing on another round of fiscal stimulus. The economy needs more fiscal stimulus. ”
What Bloomberg’s Economists Say
The favorable direction of travel still leaves the job market short of a healthy destination. Flows from employment are consistent with the deepest after the warreviews. The effects of unemployment in the shadows – labor output – and long-term unemployment will exist for a long period.
– Andrew Husby
Read more for the full comment note.
US stocks were mixed on the open, a day after the S&P 500 benchmark closed within 0.2% of its full time.
Recent declines in initial claims have spanned states where cases of coronavirus had flourished in previous weeks, such as California and Florida, as well as New York, where counts have remained low. On an unadjusted basis, initial claims had already dropped below 1 million the previous week, and last week fell about 156,000 to 832,000.
President Donald Trump last week authorized $ 300 a week in federal aid to unemployed Americans, less than the $ 600 benefit that expired in July – and limited by funds that could stop within two months
Read more: Striving for economy receives only limited help from Trump actions
States may choose to support that $ 300 with additional $ 100, but the Department of Labor announced on Wednesday that the $ 100 may consist of regular benefits already paid by states. The legality and effectiveness of the move, along with a four-month extension of payment tax, remains unclear.
In addition to claims for benefits in regular state programs, states reported 488,622 initial claims for Pandemic Unemployment Assistance, or PUA, in the week ended Aug. 8. That is the federal program that offers unemployment benefits to those who are not eligible for the state program, such as the self-employed and gig workers.
The total number of people claiming benefits in all programs decreased to 28.3 million in the week ended July 25, although this figure probably still reflects the cost to the states of reported PUA ongoing claims. However, it is the lowest in almost three months.
– With the help of Jordan Yadoo, Edith Moy, Rede Pickert, Sophie Caronello, Maeve Sheehey, and Claire Ballentine
(Mark updates.)
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