Weekly jobless claims drop to near pandemic low at 375,000 as layoffs fall and employers struggle to fill record job openings
- Initial claims for state unemployment benefits fell by 12,000 for last week
- It is the third straight weekly decline in claims as employers struggle to fill jobs
- There are a record 10.1 million job openings, more than the total unemployed
- Federal unemployment supplement is set to expire the first week of September
The number of Americans seeking unemployment benefits fell for a third straight time last week, the latest sign that employers are laying off fewer people as they struggle to fill a record number of open jobs.
Initial claims for state unemployment benefits fell 12,000 to a seasonally adjusted 375,000 for the week ended August 7, according to Thursday's report from the Labor Department.
The number of applications has fallen steadily since topping 900,000 in early January as the economy has increasingly reopened in the aftermath of the pandemic recession.
Yet employers are struggling to find qualified applicants, with the number of job openings hitting a record 10.1 million and exceeding the total number of people on unemployment benefits by 1.4 million.
Initial claims for state unemployment benefits fell 12,000 to a seasonally adjusted 375,000 for the week ended August 7, nearing pandemic lows
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Filings for unemployment benefits have traditionally been seen as a real-time gauge of the job market's health, but the measure's reliability has deteriorated during the pandemic.
In many states, the weekly figures have been inflated by fraud and by multiple filings from unemployed Americans as they navigate bureaucratic hurdles to try to obtain benefits.
Those complications help explain why the pace of applications remains comparatively high. Before the pandemic paralyzed the economy in March 2020, unemployment applications were running at about 220,000 a week.
Many states, for example, require self-employed and gig workers to first seek conventional unemployment benefits - and be turned down - before they can apply through a program that was set up last year to provide jobless aid to them for the first time.
That program, and a $300-a-week federal supplemental unemployment benefit, will expire nationwide in the first week of September. About 22 states, mostly led by Republican governors, have already canceled both programs.
New jobless claims (top) and continuing claims (bottom) are seen in the past 12 months and prior year
A total of about 12 million people are receiving unemployment benefits, down sharply from the previous week's figure of nearly 13 million.
That drop reflects that more Americans are being hired and no longer receiving benefits.
Another factor, though, is that about 22 states have ended two federal programs that provide aid to self-employed and gig workers and to the long-term unemployed.
So far at least, there has been little sign that the delta variant has depressed hiring or prompted layoffs. In July, employers added a substantial 943,000 jobs, the government said last week, and the unemployment rate sank from 5.9 percent to 5.4 percent.
Average hourly earnings jumped a sharp 4 percent in July from a year earlier, though the increase may reflect a decline in the number of people working low-income jobs as much as an increase in wages.
On Monday, the government reported that employers posted more than 10 million available jobs in June, more than the total number of unemployed people that month
On Monday, the government reported that employers posted more than 10 million available jobs in June, the most on records dating back to December 2000. That meant there were more open jobs than there were unemployed people that month. Yet those figures, too, predate the recent spike in COVID cases.
But credit card spending on airline tickets has fallen 20 percent from a mid-July peak, according to economists at JPMorgan Chase, suggesting that in response to the increase in infections, consumers may be starting to slow their travel spending, which had jumped in recent months.
And after returning to pre-pandemic levels for much of June and July, restaurant traffic dropped about 10 percent below that level in the past week, according to restaurant software provider OpenTable.
U.S. producer prices increased more than expected in June, a separate Labor Department report showed on Friday, suggesting inflation could remain high as strong demand fueled by the recovery continues to hurt supply chains.
The producer price index for final demand jumped 7.8 percent for the 12 months ending in July, rising at a 1 percent monthly rate for the second month in a row.
