Initial Claims Dip But Hold Above 1 Million
Initial unemployment claims for the week ending Aug. 22 fell slightly from last week but remained above one million, as the economic recovery from the coronavirus pandemic continues to prove difficult.
For the week ending August 22, the advance figure for seasonally adjusted initial claims fell to 1.006 million, a decrease of 98,000 from the previous week’s revised level. The four-week moving average fell to 1,068,000, a decrease of 107,250 from the previous week’s revised average.
The advance seasonally adjusted insured unemployment rate fell to 9.9 percent for the week ending August 15, a decrease of 0.2 percentage point from the previous week’s revised rate. The advance number for seasonally adjusted insured unemployment—also known as continuing claims—during the week ending August 15 fell to 14,535,000, a decrease of 223,000 from the previous week’s revised level. The four-week moving average fell to 15,215,750, a decrease of 604,000 from the previous week’s revised average.
The report said the total number of people claiming benefits in all programs for the week ending August 8 fell to 27,017,232, a decrease of 1,042,323 from the previous week. By comparison, 1,644,315 persons claimed benefits in all programs from a year ago.
“The up and down moves of recent weeks underscore that the recovery will be slow-going as long as the virus continues to circulate,” said Sarah House, Senior Economist with Wells Fargo Securities, Charlotte, N.C. “While claims have moved up and down in recent weeks, on net, the trend is improving—but only gradually.”
House said the drop in initial claims shows that the labor market “is heading in the right direction,” but there remains a long way to go. “The snail’s pace of improvement in claims suggests that the next leg of the labor market’s recovery will be much slower going,” she said.
Doug Duncan, Chief Economist with Fannie Mae, Washington, D.C., agreed. “While recent week-to-week changes have oscillated, this most recent report is consistent with a continued gradual improvement in the labor market,” he said. “Still, the level of initial claims remains well above the peak experienced in past recessions and does not include an additional 608,000 claims filed under the Pandemic Unemployment Assistance program, an increase of 83,000 from the prior week.”