Weekly Unemployment Claims Fall as Supplemental Benefit Expires
Initial weekly Unemployment Insurance claims fell as extra weekly benefits expired. Seasonally adjusted initial claims were 1.186 million for the week ending August 1, and totals for the week ending July 25 were revised up by 1,000 to 1.434 million. Despite the decline in initial weekly claims, U.S. businesses and households have their eyes on Capitol Hill, looking for a decision on the next round of stimulus. Continued claims also saw a sizeable drop, declining by 844,000 to 16.1 million for the week ending July 25, down 5% from the prior week.
LaborIQ® by ThinkWhy now estimates unemployment at 16.1% using Unemployment Claims. Friday’s jobs report for July will reveal the latest employment data providing insight on the economy’s direction. Despite the previous two months of record job growth, recent infections and unemployment data suggest growth will likely moderate for July, though the growth is expected to be strong compared to normal times. Additionally, the future of the federal government’s $600-per-week unemployment benefit, which expired on July 31, remains uncertain. A renewed agreement from Congress is expected on the enhanced benefit, which is considered a lifeline that pushes much-needed cash into the economy. A second round of stimulus checks to most households is a part of both Democratic and Republican proposals on Capitol Hill.
Weekly unemployment claims indicate the pandemic continues to inhibit a full bounceback of the U.S. economy, and LaborIQ by ThinkWhy expects initial jobless claims for August to hover around 5.8 million. July employment numbers are not expected to keep pace with two previous record-setting months as the recovery pace slows, and more moderate growth is expected in the coming months due to the likely disruption of normal cold and flu season combined with COVID-19 cases. The symptoms from a normal cold can keep schoolchildren at home and prohibit patrons from going into stores and restaurants. While this week’s drop in unemployment insurance claims numbers is a welcome sign, the road ahead still appears bumpy.
ThinkWhy continuously monitors and forecasts labor data at all levels, measuring impact to MSAs, industries, occupations, and businesses across the U.S.