The names: New claims for unemployment benefits fell to a new pandemic low last week, as companies sought to hire more workers and avoid layoffs amid a robust economic recovery.
Initial jobless claims fell from 26,000 to 360,000 in the seven days ended July 10, which matches forecasts by economists polled by the Wall Street Journal. These are traditional benefits paid by states.
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The number of people claiming state or federal benefits each week has gradually declined this year, but claims are still more than double the pre-pandemic average. The new claims ran into the 200,000 before the viral outbreak.
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Big picture: The rapidly recovering economy could grow even faster if millions of people who left the workforce after the pandemic returned to work. Companies have a record number of job openings, but they are failing to fill most of them.
“Businesses always have a hard time finding people,” Federal Reserve Chairman Jerome Powell said in testimony to Congress on Wednesday.
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Twenty-six states have cut additional federal unemployment benefits in an attempt to push unemployed people into work. Companies have complained that the benefits prevent people from taking jobs.
A new Morning Consult poll estimates that up to 1.8 million Americans are staying at home because the benefits earn them enough money to get by for now.
About 13.8 million people were receiving unemployment benefits at the end of June.
Other factors people cited include fear of the virus, childcare responsibilities, or sufficient financial cushion, perhaps because a spouse is working.
Federal benefits will expire in all states in September.
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The details: New jobless claims fell the most in Georgia, Rhode Island, Alabama and Maryland. The only states to report large increases were New York and Texas.
The new claims from two weeks ago have been revised to 386,000 from preliminary 373,000, based on more complete information.
The government is still struggling to adjust new claims for seasonal fluctuations in July due to the end of school, the July 4 vacation and the annual retooling of factories by automakers. The pandemic has exacerbated the problems.
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The number of people already receiving state unemployment benefits, meanwhile, fell by 126,000 to 3.24 million seasonally adjusted. These so-called continuing claims are constantly falling to new pandemic lows.
Some 4.7 million people who exhausted state compensation were also receiving temporary federal benefits. This was down nearly 200,000 from the previous week.
Note to readers: A government review found that the number of distinct people receiving benefits has been inflated by fraud and double counting.
Market reaction: Le Dow Jones Industrial Average DJIA,
et S&P 500 SPX,
were expected to open lower in Thursday’s trades.