US initial jobless claims fell last week, fresh pandemic low

Labor Department data showed Thursday that initial unemployment claims in routine state programs fell by 14,000 to 340,000 in the week ending Aug. The average estimate in a Bloomberg survey of economists called for a modest reduction in 345,000 new applications.

Claims issued for state benefits fell to 27 lakh for the week ending August 21.

Due to the widespread reopening of the economy and increased demand for workers, initial claims have been falling for months. Still, claims remain high compared to pre-pandemic levels, and the rapidly spreading delta version has injected uncertainty into the economic outlook, threatening future layoffs.

The recent surge in infections has started to affect consumer behaviour. High frequency data points to a moderation in demand for services such as air travel, restaurant dining and hotel occupancy. Looking ahead, the fall season could bring labor disruptions as children across the country return to in-person schooling, especially in places with low vaccination rates.

The claims figures come just ahead of Friday’s monthly jobs report, which is projected to add 725,000 jobs in August.

California, Illinois and Virginia saw the biggest reductions in unadjusted initial claims last week. Missouri and Ohio reported the largest increases.

Roughly half of the states ended federal pandemic unemployment programs — including an additional $300 weekly pay — before their official Sept. 6 end date in hopes of creating jobs. The White House has said it will not extend jobless aid further, but states can use pandemic relief funds to provide additional aid to unemployed workers.