Initial Jobless Claims Dip Below 1 Million

By at 13 August, 2020, 10:34 am

by Raymond J. Keating-

When a measure of the economy remains deep in negative territory but at a rate not as bad as previous weeks, as is the case with the latest report on initial unemployment claims from the U.S. Department of Labor, we need to be careful not to report it as good news. At the same time, any improvement is welcome.

So, indeed, it was welcome news that initial jobless claims for the week ending August 8 dipped below 1 million – registering 963,000 – for the first time since the pandemic hit the U.S. economy. The level a year earlier was 218,000.

In addition, the pre-pandemic record high (in a dataset going back to 1967) was 695,000 (reached in October 1982). Unfortunately, we have been far above that level for each week since mid-March.

Source: Federal Reserve Bank of St. Louis, FRED

Also, continuing jobless claims for the week ending August 1 came in at 15,486,000, which was down from 16,090,000 the previous week. The year-earlier number stood at 1,719,000.

And as for the total number of people claiming benefits in all programs, that number dropped by 3,056,616 to 28,257,995 in the week ending July 25. The prior year level came in at 1,690,746.

The hope is that the trend continues to be less bad in the coming weeks, and that eventually we reach a normal amount, and actually get back to an expansion in terms of economic, income and job growth. That will take vaccines and therapeutics on the market to treat COVID-19, and the right policy mix – such as tax and regulatory relief, free trade and limited government – that provides the foundation and incentives for enhanced entrepreneurship and private investment.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.


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