First-time applications for unemployment insurance hit a new low in the pandemic last week, a sign that the job market is improving towards the autumn.
Unemployment claims in the week ending Aug. 14 totaled 348,000, the Department of Labor reported Thursday. That was well below the Dow Jones estimate of 365,000 and a drop of 29,000 from the previous week.
The last time the demands were so low was March 14, 2020, just as the Covid-19 pandemic declaration hit and sent the U.S. economy to embark on its deepest but shortest recession on record.
In the ensuing weeks, more than 22 million Americans would be sent to the unemployment limit, sending the unemployment rate to skyrocket to 14.8%. The labor market has been steadily improving since then, but is still recovering from its pre-pandemic health.
The stock market futures was from their lows after the news, but contracts linked to the Dow Jones Industrial Average remained nearly 300 points.
Continued claims also fell and fell to 2.82 million on a 79,000 fall from the week before. These data run a week behind the headline requirement and also represented a new low since the pandemic hit.
The total number of benefit collectors under all programs decreased to 11.74 million, a decrease of 311.787 for the week ending 31 July and is mainly due to a large decrease in those receiving enhanced benefits, which will be fully completed in September. A year ago, the total amount under all programs was 28.7 million.
A significant portion of the decline in claims came from Texas, which fell by 8,311, according to unadjusted data. Illinois also fell 3,577 and Michigan was lower by 2,188.
Overall, the fall in demands may be good news for a labor market that has seen non-agricultural wage increases of 2.5 million over the last three months, and unemployment fell to 5.4% from 6.3% at the beginning of Year. Thursday’s data reflects the period that the Labor Department uses as its survey week for the monthly non-agricultural wages.
However, there is still a large job gap, with about 6 million fewer Americans considered employed now than before the pandemic. There were also 8.7 million workers looking for jobs in July, even though it was well below the roughly 10 million job openings in the United States.
Economists see a wide range of reasons for the inability to return to full employment. Among them, there are still fears of the pandemic, workers pushing for higher wages and the improved public benefits that have lowered incentives to take jobs.
Wages have been rising in response to current conditions, with an average hourly wage rising by 4% year-on-year in July. Before the pandemic, it would have been a record in data back to March 2007.
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