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The numbers: The number of people who applied for U.S. unemployment benefits at the end of July fell close to a pandemic low, indicating the economy has avoided major damage so far from the delta strain of the coronavirus.
Initial jobless claims dropped by 14,000 to 385,000 in the week ended July 31, the government said Thursday.
Economists polled by The Wall Street Journal had forecast 385,000 new claims.
Applications had surged to a two-month high in mid-July, but the increase appears to have stemmed from seasonal swings in summer employment.
Economists are watching to see if the contagious delta strain triggers more layoffs or discourages people from looking for work. So far there’s little evidence that it’s made a big dent in employment
Big picture: The economy was making a strong recovery before the emergence of the delta strain and it’s still too early to tell if the variant will put the brakes on U.S. growth.
Many governments have reimposed mask requirements, but they’re trying to avoid more burdensome restrictions on businesses and consumers.
The labor market is still missing millions of people who were working before the pandemic, leaving businesses scrambling to fill a record number of job openings. People are returning to the workforce, but not fast enough to ease the labor shortage.
The government’s employment report for July is likely to show some 800,000-plus new jobs were created, economists predict. A weak reading on private sector payrolls by ADP on Wednesday raised some doubts, but ADP has not been a reliable bellwether of the Labor Department’s more comprehensive employment report on a month to month basis.
Key details: New claims fell the most in Pennsylvania, Texas, Michigan and Georgia. The only state to post a large increase was Indiana, suggesting it was an isolated issue.
The number of people already collecting state jobless benefits, meanwhile, declined by 366,000 to a seasonally adjusted 2.93 million. These so-called continuing claims are now at a pandemic low.
Read: Nine million Americans will lose extra unemployment benefits soon
Altogether, some 12.98 million people were reportedly receiving benefits through eight separate state or federal programs as of July 17. Total claims averaged less than 2 million a week before the pandemic.
What they are saying? “Weekly jobless claims dropped a bit, though they are still stubbornly around the 400,000 mark,” said corporate economist Robert Frick of Navy Federal Credit Union. “The good news is that the latest week’s data was the first in the thick of rising delta variant COVID-19 cases, and so far that rise in infections hasn’t pushed up layoffs.”
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were rose in Thursday trades. Both indexes are near record highs.
