New Jobless Claims Drop Below 1 Million

New Jobless Claims Drop Below 1 Million

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The number of new unemployment claims fell below 1 million for this first time since March, the Labor Department announced Thursday.

About 963,000 Americans filed for state unemployment benefits for the week ending August 8, a drop of more than 200,000 from the week before. Another 488,000 people filed for benefits through the Pandemic Unemployment Assistance program created to assist self-employed workers, down 167,000 from the previous week.

The number of people receiving some form of unemployment benefits fell by 3.1 million from the week before, but the number is still at an historically high level of 28.2 million. The weekly data bring the total number of unemployment filings since the pandemic took hold to more than 55 million.

“Another larger-than-expected decline in jobless claims suggests that the jobs recovery is regaining some momentum but with a staggering 28 million workers still claiming some form of jobless benefits, much labor market progress remains to be done,” Lydia Boussour and Gregory Daco of Oxford Economics said in a note to clients.

Reduced pressure for another relief package? The larger than expected drop in jobless claims won’t make it any easier for negotiators to agree on a new coronavirus relief package. Republicans will likely see the data as support for their claims that the $600 per week in extra unemployment benefits millions of workers were receiving through the end of July was acting as a brake on the recovery, and that the economy is now in the middle of a rapid, V-shaped recovery. “The numbers are coming in very, very nicely," White House economic adviser Larry Kudlow said earlier this week, adding that he didn’t think the lack of a new relief bill would harm the economy.

Many economists have their doubts about the v-shaped recovery, though, given the size of the current economic hole and the inability of the U.S. to control the pandemic. “The reality is that millions of people have lost their jobs," AnnElizabeth Konkel of the Indeed Hiring Lab told CNN. “These people are faced with mounting bills, and are struggling to find work. The expiration of the expanded $600 federal unemployment benefit has only compounded the dire situation they face. Meanwhile the source of all this economic hardship, the coronavirus, remains unchecked.”

CNBC’s Steve Liesman summarized the skeptics’ view in a tweet: "If jobless claims running just under a million in the fifth month of the recession is your benchmark for an economy being in good shape, may i suggest you’ve set the bar too low? That’s still 4x the pre-recession level and about 300k above the worst level of ‘08."