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Jobless claims: Another 375,000 individuals filed new unemployment claims last week

·Reporter
·3 min read
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New weekly jobless claims took another step lower last week, with the labor market's recovery still making headway despite the lingering threat of the Delta variant. 

The Labor Department released its weekly jobless claims report on Thursday at 8:30 a.m. ET. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:

  • Initial unemployment claims, week ended August 7: 375,000 vs. 375,000 expected and a revised 387,000 during prior week 

  • Continuing claims, week ended July 31: 2.866 million vs. 2.900 million expected and a revised 2.980 million during prior week

New weekly jobless claims fell for a third straight period and came in below the psychologically important 400,000 level. Continuing claims also dipped to a fresh pandemic-era low below 3 million, pacing back toward pre-virus levels.

Economists have been expecting to see an improvement in the number of individuals returning to the labor force as more states roll off federal enhanced unemployment benefits. As of mid-summer, about two dozen states had decided to end these benefits ahead of their official September expiration date at the national level, in a move seen as incentivizing workers to return to jobs. 

As of July 24, just over 12 million individuals were still claiming unemployment benefits across all programs. This represented a drop of more than 900,000 versus the prior week, with the decline accelerating markedly from the drop of around 200,000 during the prior week. As of the latest data, more than 8.5 million claiming crisis-era Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation. 

Other data on the labor market have also recently pointed to a more robust pick-up in activity. Last Friday's jobs report from the Labor Department showed a much better-than-expected 943,000 payrolls were created in July, marking a back-to-back month with job gains north of 900,000. The unemployment rate, labor force participation rates and length of the workweek each also improved.

Additional reports have underscored the extent of the demand for workers in the recovering economy. The Labor Department's Job Openings and Labor Turnover report showed a record of more than 10 million vacancies last month. And in a separate report, the National Federation of Independent Businesses said a record share of small businesses also reported difficulties filling open positions in July. 

The recent spread of the Delta variant across the U.S. has called into question the pace of further progress in the labor market, adding another hurdle in the path toward full employment. Airlines and travel companies have been among the most vocal about the impact of the variant, with Southwest Airlines on Wednesday highlighting a deceleration in bookings and increase in cancellations as infections in hot spots rise.

"As last week revealed, incoming data at the start of Q3 points to further strong GDP growth and a recovering labor market," Sam Bullard, senior economist for Wells Fargo, wrote in a note. "That said, the Delta variant which has led to a surge in hospitalizations and a rise in deaths attributed to COVID has to be monitored and poses downside risk to the growth and labor market outlooks — especially if plans to bring back office workers and re-open schools this fall are delayed." 

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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