Data shows that new unemployment claims declined for the first time in over a month last week. The data provided some relief to analysts after a cascade of troubling data signs showing the labor market may struggle more than expected as the United States recovers from the pandemic.
The weekly figures issued Thursday show that 326,000 persons submitted initial unemployment claims in the week ending October 2, down 38,000 from the previous week.
Bloomberg said last month economists were anticipating approximately 345,000 additional claims. Another encouraging sign is that ongoing claims have dropped to around 4.2 million from over 5 million last week. The number of Americans receiving benefits is still roughly double what it was before the outbreak.
Unemployment Claims Finally Declined
Initial claims “finally” dropped down after three straight weekly increases, according to Mark Hamrick, a senior economic analyst at Bankrate. Albeit they’re still above a historic low of 312,000 in the week ending September 4.
According to the Labor Department, the number of unemployed persons in the United States is still 8.4 million. It increased from 4 million in February 2020.
Prior to the encouraging Thursday results, many data signals in recent weeks pointed to persistent labor market difficulties. Despite projections for about a million job additions, the labor market had its lowest month since January last month, adding only 235,000 positions.
Mark Zandi, the chief economist at Moody’s Analytics, said in a Business Insider report COVID-19 Delta Variant slowed the job market recovery. He echoed the experts’ concern that the pandemic’s comeback has slowed the recovery. In each of the previous three weeks, new claims were likewise greater than projected.
Bank of America said that despite the weak labor market, an estimated 7.5 million Americans stopped receiving unemployment benefits as a result of the federal government’s pandemic-era unemployment relief expiring last month. At the same time, another 3 million saw their unemployment checks cut by $300 per week. It marked the largest cutoff of unemployment benefits in US history. In just two weeks, the number of Americans getting benefits dropped from 11.3 million to 4 million.