The number of Americans filing jobless claims fell below 1 million for the first time since the height of the pandemic lockdowns in March, when weekly filings surged to an all-time record high of nearly 7 million.
Claims peaked at a record 6.867 million in mid-March, as the pandemic-driven lockdowns delivered a historic blow to the U.S. economy. In the second quarter of this year, U.S. economic output fell at its steepest pace since the Great Depression.
![Unemployment insurance weekly claims, retrieved from FRED, Federal Reserve Bank of St. Louis. (Labor Department/Federal Reserve)](/_next/image?url=https%3A%2F%2Fimg.theepochtimes.com%2Fassets%2Fuploads%2F2020%2F08%2F13%2Fweekly-jobless-claims-1200x491.jpg&w=1200&q=75)
Economists polled by Reuters expected 1.12 million weekly claims, so the news comes as a surprise to the upside. Markets met the news with tepid enthusiasm, however, with the benchmark S&P 500 and Dow Jones dipping as of midday on Aug. 13, as the drop in weekly claims may be driven by the expiration of the $600-per-week pandemic jobless supplement that likely discouraged some from filing claims.
After congressional and White House negotiators failed to reach a deal on the fifth stimulus package, which was to include some form of an extension to the jobless supplement, President Donald Trump on Aug. 8 signed an executive order prolonging the weekly payout, but reducing it to $400. Republicans have repeatedly urged a downscaling of the $600-a-week payment, arguing that it’s so generous as to discourage many people from seeking work, a form of labor market distortion that harms small businesses the most.
![Workers painting the Julien Dubuque Bridge along U.S. 20 in Dubuque, Iowa, on Aug. 24, 2015. (Dave Kettering/Telegraph Herald via AP)](/_next/image?url=https%3A%2F%2Fimg.theepochtimes.com%2Fassets%2Fuploads%2F2020%2F08%2F06%2Fmen-working-on-bridge-1200x786.jpg&w=1200&q=75)
The jobless claims report also shows that the number of people receiving benefits after an initial week of aid, a metric known as continuing claims, fell to 15.49 million in the week ending Aug. 1 from 16.09 million. Another bright spot in the report was that the total number of people receiving unemployment in all programs dropped by more than 3 million in the week ending July 25, coming in at 28.26 million. In the comparable week in 2019, there were 1.69 million people receiving unemployment benefits, a stark difference that shows the depth of the economic fallout.
The upward dynamic of labor market recovery is widely seen as straining against a surge in COVID-19 infections in parts of the country. Boston Federal Reserve President Eric Rosengren said Aug. 12 that as long as the potentially deadly bug poses a significant threat to Americans’ health, any economic rebound will be limited.
Since March, Congress has authorized about $3.6 trillion in new spending to help American families and businesses weather the fallout, with economists widely crediting the relief for minimizing the damage to the U.S. economy.