News

New Unemployment Claims Drop Below 1 Million

Dow Jones had forecast 1.1. million new unemployment filings for the week.

The number of Americans filing for unemployment benefits fell to 963,000 last week, the U.S. Department of Labor reports.

The number for the week that ended on August 8 is the lowest since governments began imposing COVID-19 lockdowns in mid-March. It marks the first time the weekly total has been less than a million since then.

Dow Jones had forecast 1.1. million new unemployment filings for the week.

The 963,000 number was 19.14 percent below the previous week’s total. The four-week average was 1.2 million, a reduction of about 7 percent from the previous week’s moving average.

The number remains above the highest pre-coronavirus total of 695,000 in 1982.

“The advance seasonally adjusted insured unemployment rate was 10.6 percent for the week ending August 1, a decrease of 0.4 percentage point from the previous week’s unrevised rate,” the Department of Labor reports.

The unadjusted unemployment data showed a decrease of 15.8 percent from the previous week, according to the Department of Labor.

“Seeing initial claims dip below 1 million is a positive sign that layoffs are easing, but we’re far from celebrating a steady recovery,” Daniel Zhao, senior economist at Glassdoor, told Fox News. “Tens of millions of people are still collecting unemployment benefits at a level far above the worst points of the Great Recession. We’ve not yet seen the light at the end of the tunnel for millions of workers.”

With the numbers nonetheless indicating a continuing recovery, the jobs report could reduce the urgency for House Democrats and Senate Republicans to reach agreement on another stimulus bill, the New York Times reports: “Efforts to reach an agreement on another pandemic stimulus package could get even tougher after weekly new jobless claims fell below 1 million for the first time since March and the federal budget deficit continued to hit record highs, reaching $2.8 trillion in July—two major elements that could shift the negotiating landscape.”

Leaders of the Democrat-controlled House of Representatives are pushing for a $2 trillion in new funding. The Trump administration wants to allocate about $1 trillion, and some GOP senators do not want any additional funding. Negotiations have been intermittent thus far.

The unemployment improvement may strengthen the Republicans’ argument, the Times reports, “with some lawmakers and White House officials saying the economy is beginning to recover and doesn’t need that level of support, and others saying that the United States cannot afford to keep piling on debt.”

As a result, “Those positions could further harden given that weekly jobless claims, which had been above one million for months, fell below that number last week, with 963,000 people filing first-time claims for benefits under regular state unemployment programs,” the Times reports. “On Thursday, [House Speaker Nancy] Pelosi doubled down on the Democrats’ position, saying that they would not agree to a stimulus package unless it provided at least $2 trillion of additional aid.”

The better-than-expected unemployment data kept the S&P 500 near its all-time high, CNBC reports:

“The S&P 500 was up 0.2%, briefly crossing its record closing high of 3,386.15 and sitting 0.2% below its intraday record of 3,393.52. The Dow Jones Industrial Average was down by 42 points, or 0.2%. The Nasdaq Composite outperformed, rising 0.9%.”

The Dow Jones Industrial Average continued its strong August performance as it too heads back toward its record high.

Further improvement in the S&P number would mark a record recovery, CNBC quotes Ed Clissold, chief U.S. strategist at Ned Davis Research, as saying.

“Reaching an all-time high would mark the fastest reversal from a 30% drop on record,” Clissold said.

This article was originally posted at Heartland Daily News and is reprinted with permission.