Initial claims for state unemployment benefits fell to about 1.2 million on a seasonally adjusted basis in the week ending August 1, the lowest weekly tally since mid-March. An additional 656,000 people applied to the Pandemic Unemployment Assistance program, which provides benefits for self-employed and gig workers, bringing the total of new jobless applications to roughly 1.8 million.
The data came in below analyst expectations of 1.4 million new state claims, offering some relief from the increases in filings over the last two weeks.
But the numbers are still bad: Even these improved numbers are alarmingly high by historical standards. New jobless claims topped 1 million for the 20th week in a row, with each week crushing the pre-pandemic record of 695,000 claims set in 1982. And the number of people receiving assistance is extraordinarily high, with more than 32 million getting some kind of unemployment aid.
“It is promising that the initial unemployment numbers have ticked down,” AnnElizabeth Konkel, an economist at Indeed Hiring Lab, told The Washington Post. "But we aren’t out of the woods yet. The claims are still much higher than the pre-covid era, so it’s still pointing to a lot of economic pain.”
And continued improvement is not guaranteed: Some economists worry that the recovery is running into headwinds, with a significant number of job losses becoming permanent, even as the data becomes harder to read as federal relief programs expire. “Both initial and continuing claims are at extremely high levels, and indicate that many employers continued to lay off workers in July,” PNC economist Bill Adams said in a note Thursday. “Further complicating the picture, the expiration of extended unemployment insurance benefits on July 31 may be clouding the signal from the claims data.”