New Jobless Claims Below 1M For the First Time Since March
Initial weekly Unemployment Insurance claims drop below one million for the first time since mid-March. Seasonally adjusted initial claims were 963,000 for the week ending August 8, and totals for the week ending August 1 were revised up slightly to 1.2 million. Continued claims dropped also, declining by 604,000 to 15.5 million for the week ending August 1, down 3.8% from the prior week. Since the peak in April, the combined total of initial and continued claims has dropped by a total of 11.6 million.
LaborIQ® by ThinkWhy now estimates unemployment at 15.9% using Unemployment Claims, due to the prolonged economic impact of COVID-19. Employment data released last week showed a modest July job gain (+1.8 million) compared to May and June’s record-setting numbers, but it was still the third-largest month of job gain in U.S. history. The total number of unemployment insurance claims has dropped by approximately 1.5 million in the past month, suggesting August will see another round of very strong growth, but still a slower pace than the initial rebound.
Job openings have started to rebound as businesses reopen. The Bureau of Labor Statistics released June Job Openings Labor Turnover data showing that job openings jumped up slightly in June after a five-year low in April, along with a decline in hires, remaining significantly lower than pre-pandemic levels.
While the job openings data is a positive sign, the data is a lagging indicator. More recent data, including a National Federation of Independent Business survey, indicates that small business optimism slipped 1.8 points in July, to 98.8. OpenTable data continues to illustrate the impact and lethargic bounceback restaurants face, with just over 60% of restaurants in OpenTable’s database taking reservations and seated diners down nearly 57% year over year, as of August 11. This is within an industry, Leisure and Hospitality, that has shown a significant rebound in recent months after being devastated during the pandemic’s early stages. This paints a stark picture of just how arduous the recovery track will be as businesses cope with the challenge of reopening amidst the ongoing COVID-19 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 4.7 million, which is 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 and fears the virus counts could remain elevated, the road ahead is still uncertain. Still, another week’s drop in unemployment insurance claims numbers is welcome news.
ThinkWhy continuously monitors and forecasts labor data at all levels, measuring impact to MSAs, industries, occupations, and businesses across the U.S.