Weekly new jobless claims edge lower despite Delta variant concerns

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The number of Americans newly seeking jobless benefits edged lower last week as the labor market continued to recover despite fresh concerns over the surge in COVID-19 cases driven by the Delta variant of the coronavirus, the feds said Thursday.

Initial filings for unemployment benefits, seen as a proxy for layoffs, reached 375,000 last week, down 12,000 from the prior week’s revised level of 387,000, according to data released Thursday by the Labor Department.

The number of Americans seeking new unemployment benefits exactly matched expectations from economists surveyed by Dow Jones.

It’s the third straight week the figure has declined.

Weekly new claims have fallen substantially from the 2020 peak of about 6.1 million new claims in a single week, but economists have expressed concern that in recent weeks, they appear to have settled at an elevated level.

Since the beginning of June, the number of weekly new claims has vacillated in a range between 368,000 and 424,000.

The country was averaging just over 200,000 new claims per week in 2019.

“Welcome improvement is seen with the new jobless claims numbers, essentially in line with expectations,” Mark Hamrick, senior economic analyst at Bankrate, said.

“On the downbeat side of the ledger, restaurant reservations and airline travel appear to be seeing some impacts from the surge in the Delta variant, which could weigh on economic activity here in the second half of the year. These impacts could be quickly reversed if we see a substantial easing in the case numbers,” he added.

Continuing claims fell by 114,000 from the prior week’s revised level of nearly 3 million, according to the new data. That figure stood at almost 14 million at the same time last year, in the thick of the pandemic.

Continuing claims have fallen significantly since peaks seen in 2020, but the figure remains about twice as high as pre-pandemic levels.

The latest data comes a week after the Bureau of Labor Statistics said the country added 943,000 jobs last month — more than expected as the labor market mounted a strong recovery in July after lackluster results in the spring.

But data from the Labor Department’s Job Openings and Labor Turnover Survey showed that the number of job openings nationwide soared to more than 10 million for the first time ever in June, showing a mismatch between demand for workers and the number of people seeking work.

And in recent days, companies have begun to warn that the surge in COVID-19 cases that’s being driven by the Delta variant is hitting corporate earnings forecasts.

Economists are closely watching jobs data to monitor the state of the recovery in the labor market.

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