Key Highlights

  • For first time since March, new weekly unemployment claims dropped below 1M
  • Initial unemployment claims last week totaled 963,000
  • New jobless claims filed under federal Pandemic Unemployment Assistance program dropped to 488,622
  • As of July 25, 28.3M people receiving some type of unemployment relief

The US Labor Department reported that initial claims for unemployment benefits dropped last week to 963,000, the first time since March that such new claims did not crack 1M. New jobless claims under the federal Pandemic Unemployment Assistance program designated for gig and free-lance workers, self-employed independent contractors and part-time workers also decreased to “just” 488,622.

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As of July 25, 28.3M were receiving some sort of emergency unemployment relief. This 28.3M represents a drop of more than 3M from the week prior.

Despite the fact that unemployment filings have dropped since March when a mind numbing 6.9M workers applied for benefits, this COVID recession dwarfs any other previous recession. The worst week on record in terms of unemployment filings was in 1982 when 695,000 filed benefit claims.

Daniel Zhao, senior economist with Glassdoor, said, “Even though we’re exiting the worst of the current crisis, we’re still above the worst of the Great Recession.”

As layoffs have slowed, “It’s even more frightening now,” said Nick Bunker, the economic research director at the Indeed Hiring Lab. What were initially thought to be temporary layoffs and furloughs are now likely to be permanent.

The overall economy has lost a bit of momentum as well. In June, employers brought back 4.8M jobs but in July, employers brought back just 1.8M, according to the Labor Department.

Private-sector data sources suggest that the economic slowdown is continuing through August. Bunker wrapped up his comments by saying, “There’s no silver lining of quick recalls like the higher levels that we saw back in March.”

 

Thanks to the US Labor Department, National Public Radio, The new York Times and Glassdoor.

Also read: Close to 500,000 Borrowers Moved into Forbearance Third Week in April, Q2 US Economy Plummets -32.9%, Steepest Decline Ever Reported, Mortgage Lenders Aren’t Taking Any Chances