U.S. initial unemployment claims drop for fourth straight week
Applications for U.S. state unemployment benefits dropped for a fourth consecutive week, a trend that suggests labor market conditions are improving as the economy recovers.
Initial unemployment claims in regular state programs dropped 29,000 to 348,000 in the week ended Aug. 14, a pandemic low, Labor Department data showed Thursday. Economists in a Bloomberg survey had called for a decline to 364,000.
Continuing claims for state benefits fell to 2.8 million in the week ended Aug. 7, also the lowest since the pandemic began.
The decrease in initial claims points to strengthening business and fewer dismissals as economic activity improves. That said, a pickup in initial filings in the next few weeks could point to labor market weakness as the delta variant of Covid-19 spreads.
Some states and cities have reintroduced mask mandates in recent weeks in response to coronavirus variants, and businesses have pushed back their return-to-office plans. But there's little evidence so far to suggest the delta variant has resulted in layoffs, especially because restrictions haven't been put on restaurants, bars and entertainment venues.
Texas and Illinois posted the largest declines in initial claims last week. Virginia posted the largest increase, followed by New Mexico and California.
More than 20 governors have prematurely ended federal unemployment programs -- including an extra $300 weekly payment -- put into place during the pandemic, hoping that removing the enhanced payments would incentivize workers to look for jobs. Lawsuits in some of those states challenging the governors' legal authority to end the aid could restore the halted benefits until they officially expire in early September.
The initial claim figures coincide with the survey week for the Labor Department's monthly job report.
Continuing claims in all programs declined to 11.7 million in the week ended July 31. That compares to a high of about 32.8 million in June 2020.
