Weekly Initial Claims for Unemployment Benefits Appear to be Trending Lower Again
Initial claims for regular state unemployment insurance totaled 340,000 for the week ending August 28, a drop of 14,000 from the previous week’s revised tally of 354,000 (see first chart). This is the fifth decline in the last six weeks and the lowest level of the pandemic.
The four-week average fell 11,750 to 355,000, also the lowest of the pandemic. A record number of openings continue to be reported across many industries and surveys of employers suggest filling open positions remains one of the biggest challenges. Furthermore, retaining workers is also a high priority as turnover across the labor market remains high with large numbers of employees quitting for better paying and/or better-quality jobs.
The surging number of Covid cases due to the Delta variant continues to cloud the outlook for economic growth. Furthermore, the combination of labor shortages and rising Covid cases may exacerbate materials shortages as well as logistical problems, sustaining upward pressure on prices in the short term.
The number of ongoing claims for state unemployment programs totaled 2.796 million for the week ending August 14, a rise of 1,522 from the prior week. That is the first increase since July 10 but is the 21st consecutive week below 4 million and the fourth below 3 million since the start of the pandemic (see second chart).
Continuing claims in all federal programs totaled 9.389 million for the week ending August 14, an increase of 177,004. That is the second increase in a row but is still the 14th consecutive week that Federal continuing claims have been below 12 million (see second chart).
The latest results for the two programs put the total number of people claiming benefits in all unemployment programs, including all emergency programs, at 12.186 million for the week ended August 14, a gain of 178,526 from the prior week. The result is the 16th consecutive week below 16 million but the second week back above 12 million after dropping below the 12 million mark for the week ending July 12 (see second chart).
Robert Hughes
Robert Hughes joined AIER in 2013 following more than 25 years in economic and financial markets research on Wall Street. Bob was formerly the head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals. Prior to BBH, Bob was a Senior Equity Strategist for State Street Global Markets, Senior Economic Strategist with Prudential Equity Group and Senior Economist and Financial Markets Analyst for Citicorp Investment Services. Bob has a MA in economics from Fordham University and a BS in business from Lehigh University.
