Another 340,000 American workers filed for unemployment last week, a historically elevated number that nonetheless marked the lowest weekly level of jobless claims since the pandemic struck.
Continuing claims, which represent the number of people collecting unemployment benefits after earlier filing an initial claim, fell by 160,000 to 2.7 million, also the lowest level since March 2020.
“After a series of negative surprises with economic data, new pandemic era lows for both new and continuing jobless claims are welcomed developments,” Bankrate senior economic analyst Mark Hamrick told The Epoch Times in an emailed statement. “There’s still a way to go to get back into the low-to-mid 200,000 range where new claims stood before the pandemic exploded and took a massive toll on the U.S. economy.”
The Labor Department’s jobless claims report also showed that nearly 12.2 million Americans were receiving some form of unemployment assistance in the week ending Aug. 14, an over-the-week increase of nearly 180,000 and evidence that the labor market recovery still has a ways to go. The U.S. economy remains around 5.7 million jobs down compared to the February 2020 peak.
Meanwhile, looming large is Sept. 3’s so-called nonfarm payrolls data, with the closely watched jobs report setting the stage for deliberations around labor market health at the Federal Reserve’s policy meeting later in the month. Continued labor market recovery is upping pressure on Fed officials to begin withdrawing some of the crisis support measures for the economy.
“Now the August employment report is anxiously awaited,” Hamrick said. “At issue is whether, or how much, the surge in COVID cases has dampened hiring. Other headwinds include inflation spurred by global supply chain disruptions and the mismatch between available workers and open positions.”
“This continues the perplexing paradox of companies reporting record ‘labor shortages’—companies reporting inability to find workers, while workers continue to report inability to find jobs at a rate 50 percent higher than before the 2020 lockdowns,” John Rosen, a professor at the Pompea College of Business, University of New Haven, wrote in an emailed statement to The Epoch Times.
In response to the pandemic recession, the Fed dropped its benchmark interest rate to near zero and set out on a massive asset-buying program, purchasing some $120 billion in monthly Treasury and mortgage securities. Powell said in Jackson Hole that the Fed could start reducing the pace of asset purchases this year.