First-time jobless benefit claims moved back above 1 million after dipping below that threshold a week earlier as businesses continue to struggle bringing workers back on the job amid the pandemic.
The Labor Department reported Thursday that 1.106 million Americans filed for first-time jobless benefits for the week ended Aug. 15, up from a revised 963,000 claims the week earlier. Economists polled by FactSet had been expecting claims of 920,000.
Continuing claims, however, which are the number of people not just filing but staying on unemployment benefits, came in at 14.844 million for the week ended Aug. 8, down from a revised 15.480 million the week before. The continuing claims numbers are reported with a one-week lag, but are considered a better gauge of the labor market.
While generally trending lower in recent weeks, the numbers continue to reflect companies’ ongoing struggles to remain open, productive and in need of workers, particularly with the coronavirus’s resurgence in many regions across the country.
"What’s more concerning is the raw size of the claims, still 6.9 times higher than during the pre-Covid era," said Indeed Hiring Lab Economist AnnElizabeth Konkel. "Unfortunately getting the virus in check dictates when there’ll be relief from this economic nightmare, and it doesn’t look like it will be soon."
While the U.S. economy added a better-than-expected 1.8 million jobs last month and the headline unemployment rate dipped slightly to 10.2%, the pace of hiring slowed, mainly from a surge in coronavirus infections and new business closures.
It also points to what economists and more recently Federal Reserve officials anticipate concerning the rebound in growth since March - they say it is temporary, and additional flare-ups of Covid-19 potentially exacerbated by back-to-school and other plans next month could mean a second dip in economic activity, and in turn an increase in jobless benefit claims.
U.S. central bankers backed off in July from an earlier readiness to set a clearer bar for when they might raise interest rates, a step that would affirm their belief that the economy has definitely responded to ultra-loose monetary policy.
“With regard to the outlook for monetary policy beyond this meeting, a number of participants noted that providing greater clarity regarding the likely path of the target range for the federal funds rate would be appropriate at some point,” according to minutes of the Federal Open Market Committee’s July 28-29 meeting released on Wednesday.
Through Aug. 1, 49 states reported 11.224 million individuals claiming Pandemic Unemployment Assistance benefits, and 48 states reported 1.289 million people claiming Pandemic Emergency Unemployment Compensation benefits.
The largest increases in initial claims for the week ended Aug. 8 were in Nevada (+4,028), Puerto Rico (+3,601), Kansas (+2,248), Hawaii (+247), and South Dakota (+198), while the largest decreases were in New York (-21,366), California (-19,534), Florida (-16,702), Georgia (-11,596), and Virginia (-10,653).
Indeed Hiring Lab's Konkel noted that the trend in job postings on August 14 was 20.3% lower than one year prior -- the first reversal of the trend since late April and an indication that the partial economic bounce-back "looks to be sputtering out."
"Though August looks a lot better than April, the months of economic devastation continue to pile up," Konkel said. "With less jobs available for the enormous numbers of people still losing their jobs, it will be a long time until the labor market is back to what it once was."