Jobless claims fall almost 250,000

Initial jobless claims fell by 249,000 in early August to 1.19 million and touched the lowest level since the coronavirus pandemic began more than four months ago, a surprising decline that suggest some improvement in the labor market despite another viral outbreak.

New applications for unemployment benefits, a rough gauge of layoffs, slipped for the first time in three weeks to 1.19 million from 1.44 million, the Labor Department said Thursday. It was the biggest one-week decline since early June.

Economists polled by MarketWatch had forecast 1.4 million new claims in the seven days ended Aug. 1. These seasonally adjusted figures reflect applications filed the traditional way through state unemployment offices.

It’s possible the decline in claims stems from the pending expiration of a $600 federal unemployment stipend at the end of July, economists say. The program’s lapse could have led some people to believe they were no longer eligible to file.

The highest jobless claims were reported in California, Florida, Texas, Georgia — states that have experienced fresh outbreaks of COVID-19.

A steady decline in jobless claims briefly came to a halt in July to amid the surge in Covid-19 cases. Some restrictions were reimposed on businesses and companies were forced to lay off or furlough workers, some for the second time.

Similarly, new claims for benefits filed through a temporary federal-relief program fell sharply to 655,707, bringing total U.S. applications for the week to an unadjusted 1.64 million. That’s also the lowest level in several months.

The number of people receiving traditional jobless benefits through the states, known as continuing claims, dropped by a seasonally adjusted 844,000 to a new post-pandemic low of 16.1 million in the week ended July 25.

Some 31.3 million people were still receiving benefits through eight state and federal assistance programs as of July 18, the most recent data available. That’s up from an unadjusted 30.8 million in the prior week.

MarketWatch is reporting select jobless claims data using actual or unadjusted figures to give a clearer picture of unemployment. The seasonally adjusted estimates typically expected by Wall Street have become less accurate during the pandemic because its unprecedented nature makes comparisons with the past untenable.