USA weekly jobless claims fall below 1M

Marco Green
August 13, 2020

There were 963,000 new filings for state unemployment benefits in the week ending August 8-a drop of 228,000 claims from the previous week, reports the Wall Street Journal.

New claims for the week ending August 8 represent the lowest weekly total since the coronavirus pandemic hit the state five months ago, putting almost 1.5 million people out of work since. That came in below the consensus economist estimate of 1.1 million compiled by Bloomberg. Another bright spot in the report was that the total number of people receiving unemployment in all programs dropped by over 3 million in the week ending July 25, coming in at 28.26 million. Industry groups and Republicans claimed that the $600 weekly supplement was encouraging some unemployed people to stay at home.

At the same time, other high-frequency indicators, such as credit-card spending, show a gradual or stalled economic rebound.

As of the end of June, Maryland's unemployment rate was 8%. "But we can not be sure or not if this is good news for the recovery or whether it is the lapse in those $600 weekly checks from the federal government that is now a disincentive for some newly jobless workers to file", Chris Rupkey, chief financial economist for MUFG Union Bank, said in a note ahead of results. "One concern for both the job market and the broader economy is the lack of urgency in passing another round of fiscal stimulus".

"Unemployment remains a huge problem for the US economy", said Gus Faucher, chief economist at PNC Financial in Pittsburgh.

The latest declines in initial claims spanned states where coronavirus cases had bloomed in prior weeks, such as California and Florida, as well as NY, where counts have remained low. That's well above the pre-pandemic record of 6.6 million, The Wall Street Journal notes.

The $600-a-week jobless supplement expired on July 31.

For states to set up systems to distribute a new $300 federal jobless benefit, their labor departments would need more guidance from the federal government, noted Michele Evermore, a senior researcher at the National Employment Law Project. The legality and effectiveness of the move, along with a four-month deferral of payroll taxes, remains unclear. The CARES Act gave the jobless an extra $600 per-week on top of their state benefits, but that money has expired and lawmakers can't agree on how much to spend on that going forward.

Continued jobless claims, which count people who have filed for unemployment benefits for at least two weeks in a row, stood at 15.5 million on a seasonally adjusted basis.

Other reports by Click Lancashire

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