CHICAGO (NewsNation Now) — The number of Americans seeking unemployment benefits dipped slightly last week, as the economy and job market continue to recover from the coronavirus recession.
The Labor Department said Thursday that jobless claims dipped by 12,000 the previous week to 375,000. The weekly number of first-time applications for benefits, which generally tracks layoffs, has fallen steadily since topping 900,000 in early January.
Claims have dropped from a record 6.149 million in early April 2020 but are still above the 200,000-250,000 range that is viewed as consistent with a healthy labor market. The number of continued claims dropped 366,000 to 2.93 million.
“Welcome improvement is seen with the new jobless claims numbers, essentially in line with expectations,” said Mark Hamrick, senior economic analyst at Bankrate. “Of course, new claims reflect recent job loss, rather than the pace of hiring as such. The newly unemployed who are inclined to work should face generally positive prospects, an employment safety net, so to speak.”
Filings for unemployment benefits have traditionally been seen as a real-time gauge of the job market’s health, but the measure’s reliability has deteriorated during the pandemic. In many states, the weekly figures have been inflated by fraud and by multiple filings from unemployed Americans as they navigate bureaucratic hurdles to try to obtain benefits.
Many states, for example, require self-employed and gig workers to first seek conventional unemployment benefits — and be turned down — before they can apply through a program that was set up last year to provide jobless aid to them for the first time. That program, and a $300-a-week federal supplemental unemployment benefit, will expire nationwide in the first week of September. About 22 states, mostly led by Republican governors, have already canceled both programs.
Those complications help explain why the pace of applications remains comparatively high. Before the pandemic paralyzed the economy in March 2020, unemployment applications were running at about 220,000 a week.
So far at least, there has been little sign that the delta variant has depressed hiring or prompted layoffs. In July, employers added a substantial 943,000 jobs, the government said last week, and the unemployment rate sank from 5.9% to 5.4%. Still, that report was based on a survey that was conducted in mid-July, before a surge in COVID-19 delta cases took off.
Credit card spending on airline tickets has fallen 20% from a mid-July peak, according to economists at JPMorgan Chase, suggesting that in response to the increase in infections, consumers may be starting to slow their travel spending, which had jumped in recent months.
“On the downbeat side of the ledger, restaurant reservations and airline travel appear to be seeing some impacts from the surge in the delta variant, which could weigh on economic activity here in the second half of the year,” Hamrick said. “These impacts could be quickly reversed if we see a substantial easing in the case numbers.”
And after returning to pre-pandemic levels for much of June and July, restaurant traffic dropped about 10% below that level in the past week, according to restaurant software provider OpenTable.
