Jobless claims fall only slightly

Initial jobless claims fell slightly in the second week of July to a post-pandemic low of 1.30 million, in onlyl a small decline that points to ongoing stress in the labor market as the economy struggles to cope with the latest coronavirus outbreak.

New applications for unemployment compensation, a rough gauge of layoffs fell 10,000 in the seven days ended July 11 to 1.30 million from a revised 1.31 million in the prior week, the Labor Department said Thursday. The figures are seasonally adjusted.

Economists polled by MarketWatch had forecast 1.24 million new claims. These figures reflect applications filed the traditional way through state unemployment offices.

An unadjusted 928,488 people also applied for benefits through a temporary federal-relief program.

The number of people receiving traditional jobless benefits through the states, meanwhile, fell 422,000 to 17.34 million in the week ended July 4. These are known as continuing claims. This is lowest level since mid-April. This shows there has been some rehiring.

New jobless claims were the highest in Florida, Georgia and California.

Those state have experienced fresh outbreaks of COVID-19. California closed a large swath of its economy again this week.

Roughly 57 million new claims have been filed since mid-March. Before the crisis the states processed fewer than 225,000 claims a week.

Big picture: Initial jobless benefit claims have stalled since mid-June when they hit 1.57 million. An economic rebound in May and June has lost momentum in July amid a fresh wave of coronavirus cases that has forced many states to either reimpose partial lockdowns or pause reopening plans.
The latest setback is expected to put more people out of work again and delay the return of others to their jobs, making it harder for the economy to recover. Economists say Washington has to extend emergency unemployment benefits and increase other aid to prevent the situation from getting worse.