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New Jobless Claims Hit Pandemic Low After 11 Million Americans Lose Out On Federal Unemployment Benefits

This article is more than 2 years old.
Updated Sep 9, 2021, 02:40pm EDT

Topline

On the heels of the biggest cutoff to federal unemployment benefits in history, jobless claims fell to their lowest levels during the pandemic last week, a promising sign for the broader economy as the labor market's recovery weakens amid the recent delta variant-sparked surge in Covid-19 cases.  

Key Facts

About 310,000 people filed initial jobless claims in the week ending September 4, down 35,000 from the previous week and the lowest level since March 14, 2020, according to the weekly data released Thursday.

Economists were expecting about 335,000 new claims last week, according to Bloomberg data.

Meanwhile, roughly 11.9 million Americans were still receiving some form of jobless benefit, down about 255,000 from one week prior and significantly lower than the 30.4 million continued claims filed in the comparable week last summer.

Crucial Quote

"With another significant move lower, new jobless claims have reached a fresh pandemic era low, seemingly on the verge of finally pushing below the 300,000 level," Mark Hamrick, a senior economic analyst at Bankrate, wrote in a Thursday note, also pointing out claims surged by more than 300% in Louisiana, to roughly 9,000, after Hurricane Ida. "The coming weeks will produce some noisy data challenging interpretation and understanding, as impacts of Ida, the end of federal pandemic unemployment benefits, the still raging Covid pandemic and supply constraints muddle the picture while posing headwinds for the economy."

Big Number

5.2%. That was the unemployment rate in August, according to the Labor Department’s monthly jobs report, down from 5.4% in July.

Key Background

The labor market posted its worst monthly showing since January last month, adding back only 235,000 jobs despite forecasts calling for nearly 1 million additions, according to data released Friday by the Labor Department. “The delta variant of Covid-19 appears to have dented the job market recovery,” Mark Zandi, the chief economist of Moody’s Analytics, said in a statement last week, echoing other experts concerned the pandemic’s resurgence has started to curtail the economic recovery. There are still 8.4 million unemployed people in the United States, markedly higher than 4 million in February 2020. 

Tangent

An estimated 7.5 million Americans stopped receiving jobless benefits entirely as a result of the federal government's pandemic-era unemployment relief expiring on Monday, according to Bank of America, while another 3 million people saw their unemployment checks cut by $300 a week—marking the largest cutoff of U.S. unemployment benefits in history.

Further Reading

U.S. Posts Record 10.9 Million Job Openings After Nearly 11 Million Americans Lose Federal Unemployment Benefits (Forbes)

US Added 235,000 Jobs In August—Revealing 'Major' Labor Market Slowdown As Delta Variant Threatens Economic Recovery (Forbes)

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