U.S. Unemployment Claims Dip Again, But Country 6.8M Jobs Short Compared to Feb. 2020

U.S. unemployment claims dipped again last week by 14,000 to 385,000 but the country is still 6.8 million jobs short compared to February 2020 before the COVID-19 pandemic hit in March of last year, the Associated Press reported.

The Labor Department announced the drop in unemployment claims last week compared to the week before when 399,000 Americans applied for the benefits. This shows a decline since early January when unemployment applications were at 900,000. However, the unemployment application rates are still high when looking at before the pandemic when there were about 220,000 unemployment claims a week.

Although COVID-19 cases are on the rise with the spread of the Delta variant, Contingent Macro Advisors wrote in a research note that "the surge in COVID cases related to the Delta variant is unlikely to cause a renewed spike in joblessness as there have been few shutdowns so far.''

An average of more than 70,000 new COVID-19 infections are being reported in the U.S. daily.

For more reporting from the Associated Press, see below.

Since cratering in the spring of 2020, the U.S. economy has bounced back as the rollout of vaccines encourages businesses to reopen or return to normal operating hours and consumers to return to shops, restaurants and bars. The United States has been adding more than 540,000 jobs a month this year, and the Labor Department's July jobs report out Friday is expected to show it tacked on nearly 863,000 more last month, according to a survey of economists by the data firm FactSet.

Companies are posting job openings — a record 9.2 million in May — faster than applicants are showing up to fill them. Many states have responded to business complaints of a labor shortage by ending expanded federal unemployment benefits meant to ease financial strains from the health crisis, including an extra $300 a week on top of traditional state benefits. The federal benefits are scheduled to expire nationwide on September 6.

Altogether, 13 million Americans were receiving some type of unemployment aid the week of July 17, down from 13.2 million the previous week and 32 million a year earlier.

The health crisis isn't over. COVID-19 cases are rising as the highly contagious Delta variant spreads, largely among the unvaccinated. There were fewer than 12,000 cases a day in late June.

So far, the uptick in cases hasn't had noticeable economic consequences.