Weekly jobless claims dipped below 1 million for the first time since March. But the numbers still aren’t pretty

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In a pandemic, any incremental improvement is something of a relief. But taking a step back, the numbers are still staggering.

On Thursday, the Department of Labor said that weekly initial jobless claims were 963,000 for the week ending Aug. 8—down 228,000 from last week’s revised level, and, perhaps most importantly, below the 1 million mark for the first time in 20 weeks.

While the numbers are certainly better, “it’s just a testament to how far we’ve fallen. These numbers are bad. There’s no getting around it,” Edward Jones’s Nela Richardson states. “The economy isn’t creating new jobs, it’s just recouping these jobs that were lost.”

Indeed, Richardson is wary. “One week does not mark a trend, so that’s the first caution. The four-week moving average also went down, so that feels like some good news,” she tells Fortune. “I am concerned, though, that the momentum in the job market is losing steam. So that’s what I want to watch out for to make sure that momentum continues and that the claims, which suggest temporary layoffs, stay temporary.”

Indeed, fall is quickly approaching, and with it so is “the risk that the outbreak could see another economically damaging spike, as people resume more indoor activities and some school students return to in-person learning,” Bankrate.com senior economic analyst Mark Hamrick said in emailed comments Thursday.

And states seeing spikes in coronavirus cases like Texas, Georgia, and Florida are also seeing initial jobless claims come down. (In fact, Florida had the biggest drop in the country.)

But the big concern for many is that jobless claims remain extremely elevated compared to pre-pandemic levels (see chart), even as the $600 enhanced unemployment benefit just ended in July.

“It remains quite stunning that Congress has yet to agree on a fresh round of relief legislation with so many Americans hurting financially,” Hamrick said. “Even after the President’s controversial and narrowly focused executive orders, the nation’s governors and business interests alike have urged all sides to redouble their efforts to pass meaningful and much needed legislation. That focus should not ease because of slight improvement in still extremely elevated new jobless claims.”

While the unemployment rate has ticked down for the last few months, it still stands at a very elevated 10.2% for July, down from 11.1% in June. And although President Trump issued an executive order over the weekend to restart enhanced unemployment benefits, it’s at the very least questionable that the President will actually be able to get this done legally.

Plus, those like Richardson are worried not only about the timing of when new stimulus may pass, “but also how long” the stimulus will last. She believes we may need enhanced unemployment benefits through January.

Meanwhile, for investors, a snag in new stimulus plans may mean more volatility ahead, given that “a lot of the market rebound is based on the premise of continued stimulus. If there’s a hole in that argument for the markets, you might see a pullback or more volatility,” Richardson notes.

But, as Richardson points out, “one issue on these numbers could be that there’s less urgency in Congress if the numbers are going down for a deal to get done quicker.”