New jobless claims in the US fall below 1m for the first time since March

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New claims for unemployment benefits in the United States fell below 1 million for the first time since mid-March, as the pace of claims eased for a second week in a row as businesses slowly emerged from coronavirus restrictions.

Initial jobless claims totaled 963,000 on a seasonally adjusted basis last week, up from 1.2 million the week earlier, according to the US Department of Labor. Economists had anticipated 1.1 million new requests.

The Federal Pandemic Unemployment Assistance Program, which extends assistance to the self-employed or others who would not qualify for regular unemployment benefit, had 488,622 new applicants on an unadjusted basis. This was down from 655,999.

The number of Americans actively collecting public unemployment assistance fell more than expected to 15.5 million, from 16.1 million for the week ending Aug. 1. Persistent demands represented 10.6 percent of the workforce, compared to 11 percent.

Employers cautiously resumed hiring over the summer, although that was not enough to make up for the huge losses in the spring. The United States has gained more than 9 million jobs in the past three months, which is about 43 percent of the more than 21 million jobs lost in March and April.

Unemployment remains historically high, and the drop in new claims comes as the White House and Congress struggle to agree on a new stimulus package to help the millions of Americans left unemployed amid the pandemic.

“Especially after rising Covid levels recently, these drops show the tenacity of Americans who want to get their jobs back,” said Robert Frick, business economist at the Navy Federal Credit Union.

President Donald Trump signed executive orders last week to expand additional unemployment assistance and defer payroll taxes, among other relief measures, after lawmakers in Washington failed to reach agreement on a new stimulus plan. One of the commands aims to provide at least $ 300 per week in additional benefits. Additional weekly aid of $ 600, in addition to state benefits, expired at the end of July.

Joshua Shapiro, chief US economist at MFR, said additional unemployment assistance is expected to start reaching the unemployed by the end of August at the earliest. Based on the current number of eligible recipients, the $ 300 per week in federal funds would last about six weeks, he added.

“The bottom line is that the executive order is not a substitute for longer-term action that would require congressional approval and Mr. Trump’s signature,” Shapiro said.

Economists have warned that epidemics across the country threaten to prolong damage to the economy. The July jobs report showed that the number of jobs lost permanently was 2.9 million, while the number of unemployed who started looking for work was 2.4 million. Both figures are unchanged from June.

Some states, including California, Florida and Texas, have reintroduced curbs at bars and other businesses in hopes of reversing an increase in Covid-19 cases this summer. Health officials have said the Midwest and other areas spared the worst of the pandemic could also face rising infection rates.

Florida, New York, Georgia and Texas saw the biggest drops in jobless claims for the first time last week, according to unadjusted leading figures. Nevada was among the few states to report a faster rate of new claims.

Unemployment claims have fallen to their lowest level since coronavirus-related shutdowns hit the economy hard. Weekly claims have remained above 1m for 20 consecutive weeks, from a total of 282,000 for the week ending March 14. Continuing claims have retreated to levels last seen in April.

Overall, 28.3 million people were claiming benefits in state and federal programs as of July 25, up from 31.3 million the week before, based on unadjusted numbers. This tally, which is reported two weeks late, includes PUA claims and another program under the Cares Act that extends unemployment benefits up to 13 weeks.

“Another larger than expected drop in jobless claims suggests that the employment recovery is picking up momentum, but with a staggering 28 million workers still claiming some form of jobless benefits, there is still still a lot of progress to be made in the job market, ”according to analysts at Oxford Economics. .

US stocks moved sideways Thursday in reaction to the data. The benchmark S&P 500 was up slightly, a day after hitting a record high. Nasdaq Composite technology advanced 0.4%.

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