U.S. Labor Market Recovery Strengthens Gov't Claims

The number of Americans filing new claims for unemployment benefits declined further last week, while layoffs dropped to their lowest level in just over 21 years in July as companies held on to workers amid a labor shortage, Lucia Mutikani reported for Reuters.

Photo Insert: The US Department of Labor, Washington DC

The weekly unemployment claims report from the Labor Department on Thursday, the latest data on the economy's health, also showed the number of people on state jobless rolls dropped in late July to its lowest level since March 2020, when mandatory closures of nonessential businesses were enforced to slow the first wave of COVID-19 cases.

Initial claims for state unemployment benefits fell 14,000 to a seasonally adjusted 385,000 for the week ended July 31. Data for the prior week was revised to show 1,000 fewer applications received than previously reported.

Economists polled by Reuters had forecast 384,000 applications for the latest week.

There is no sign yet that a spike in COVID-19 infections, driven by the Delta variant of the coronavirus, is disrupting economic activity. Nearly half of the population has been fully vaccinated.

Claims remain above their pre-pandemic level of 256,000, though they have dropped from a record 6.149 million in early April 2020. There are still concerns that rising coronavirus cases could slow the labor market recovery amid a shortage of workers.

There were a record 9.2 million job openings as of the end of May. About 9.5 million people are officially unemployed. The claims report showed the number of people continuing to receive benefits after an initial week of aid dropped 366,000 to 2.930 million during the week ended July 24, the lowest level since the pandemic started.

The decline in the so-called continuing claims was led by California, which saw 256,370 people dropping off unemployment rolls.

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