United States jobless claims fall below 1m for first time since mid-March

Daniel Fowler
August 13, 2020

New unemployment claims fell below a million last week for the first time since government restrictions were put in place in March that closed or limited businesses deemed nonessential to slow the spread of COVID-19.

In addition to applications for benefits in regular state programmes, states reported 488,622 initial claims for Pandemic Unemployment Assistance (PUA), in the week ended August 8. This figure came in better than the market expectation of 1.1 million and was the first reading below 1 million since mid-March.

Economists were expecting initial claims of 1.1 million and continuing claims of 15.8 million, based on median estimates.

A total of 963,000 jobless claims were filed, representing a week-on-week drop of 228,000. Twenty-three states have paused or reversed their business re-openings.

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.

The weekly number is the lowest level of new jobless claims seen since the coronavirus pandemic froze the United States economy.

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All told, fewer people are also continuing to receive state jobless aid.

The bigger-than-expected decline in jobless claims follows a slowdown in new coronavirus cases, underlining how important controlling the virus is to an economy that remains well below pre-crisis measures in most respects. It marked a second straight weekly decline following two consecutive weeks of increases, and it's the first time during the pandemic in which the number has been below 1 million.

For months, on top of their state benefit, unemployed Americans had also received the $600 a week in federal jobless aid.

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.

In addition to people who applied last week for state benefits, almost 489,000 others sought jobless aid under a new program that has made self-employed and gig workers eligible for the first time. That figure isn't adjusted for seasonal trends, so it's reported separately. A total of 28.3 million people were receiving unemployment checks in the week ending July 25, down 3.066 million from the prior week. The monthly jobs report, released last week, found the pace of the economic recovery slowing in July even though more jobs were recovered than lost.

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