First-time jobless benefit claims came in at the slowest pace since the pandemic forced the shutdown of the U.S. economy in March, raising expectations that the the labor market may slowly be turning the corner after suffering its worst rout in generations.
The Labor Department said Thursday that 1.186 million Americans filed first-time jobless claims for the week ended Aug. 1, down from a revised 1.434 million claims the week earlier, as U.S. employers stepped back up their efforts to reopen and rehire, despite renewed virus flare-ups in various states and cities.
Economists polled by FactSet had been expecting 1.3 million claims up to last Saturday.
Initial claims for jobless benefits have held roughly steady at more than 1.4 million a week since late June, according to the Labor Department. That's well below the 6.5 million claims recorded in the first dark days of the pandemic but still well above the highest on record before this year, which was 695,000 in 1982.
“Falling unemployment insurance claims is a positive sign the recovery is progressing cautiously," said Glassdoor Senior Economist Daniel Zhao. "However, this report also shows that unemployment benefits remain a vital life preserver for tens of millions of Americans during a health and economic crisis."
Continuing claims, which are the number of people not just filing but staying on unemployment benefits, came in at 16.107 million for the week ended July 25. The continuing claims numbers are reported with a one-week lag, but are considered a better gauge of the labor market.
Through July 18, 49 states had reported 13.0 million claims for Pandemic Unemployment Assistance benefits, and 48 states had reported 1.1 million Pandemic Emergency Unemployment Compensation benefit claims.
The largest increases in initial claims for the week ended July 25 were in Virginia (+5,020), Nevada (+2,842), Missouri (+2,606), Indiana (+2,218), and New Jersey (+2,141), while the largest decreases were in California (-44,941), Georgia (-37,329), Florida (-17,514), Louisiana (-13,568), and Texas (-11,104).
The Labor Department will release its broadest picture of July employment on Friday in the monthly jobs report. Economists surveyed by FactSet are forecasting 1.5 million jobs were added last month and that the unemployment rate fell to 10.6% from 11.1% in June.
"Anticipation certainly mounts for the full jobs picture tomorrow," said Mike Loewengart, Managing Director, Investment Strategy with E*TRADE Financial. "While any positive momentum is definitely welcomed, let’s keep in mind we’re still far way from pre-pandemic levels."