Weekly Jobless Claims Top 1M Again, But Continued Claims Fall
Initial weekly Unemployment Insurance claims jump back above 1 million as the end of summer poses a new set of challenges. Seasonally adjusted initial claims were 1.1 million for the week ending August 15, and totals for the week ending August 8 were revised up slightly to 963,000. Continued claims showed a large drop from the prior week, declining by 636,000 to 14.8 million for the week ending August 8, down 4.1% from the prior week. Since the peak in April, the combined total of initial and continued claims has dropped by a total of 11.8 million.
LaborIQ® by ThinkWhy now estimates unemployment at 16.0% using Unemployment Claims, due to the prolonged economic impact of COVID-19. The total number of unemployment insurance claims has dropped by approximately 1.6 million in the past month, suggesting August will see another round of very strong job growth, but still at a slower pace than the initial rebound.
With millions of students returning to schools and universities across the country, new health concerns rise, and virtual learning poses new challenges for the fall semester for both employees and local economies.
Data on characteristics of workers filing continued claims shows where the slow economic activity will continue to inhibit growth. A ThinkWhy analysis of July data from 29 states shows industries that continue to stagger through the ongoing economic toll of COVID-19. Nearly 20.0% of continued claims are filed by workers in Accommodations and Food Services (up from 16.7% in June), 10.3% in Healthcare and Social Assistance (9.6% in June) and 9.4% in Retail Trade (10.8% in June).
The Bureau of Labor Statistics reported that job openings and hires in June grew significantly in Accommodations & Food Services as businesses sought to reopen and consumers sought a sense of normalcy, but unemployment data shows there is a long way to go to get employees back to work. Retail Trade, for example, saw only a small gain in openings, but hires increased, as workers returned to their previous role. Despite the bounceback, the number of retail chain bankruptcies is approaching the Great Recession record based on a tally by S&P Global Market Intelligence. This paints a stark picture of just how arduous the recovery track will be as businesses cope with the challenge of reopening and rehiring during a public health crisis.
Weekly unemployment claims indicate the pandemic continues to inhibit a rebound of the U.S. economy, but the labor market is still progressing. LaborIQ® by ThinkWhy expects initial jobless claims for August to hover around 4.8 million, a large number but also an improvement from recent months. The economy awaits Congress’ new fiscal stimulus package, and employment gains are expected to slow.
With schools opening, evidence suggests that more students will return to virtual learning as virus counts remain elevated, and the road ahead remains uncertain. Still, the general downward trend in unemployment insurance claims points toward a continued, albeit slow, recovery.
ThinkWhy continuously monitors and forecasts labor data at all levels, measuring impact to MSAs, industries, occupations, and businesses across the U.S.