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Unemployment Claims Fall to New Pandemic-Era Low But Remain Historically High

Initial filings for unemployment insurance, a proxy for layoffs, came in at 385,000 for the week ended July 31, a drop of 14,000 over the previous week's revised level, the Labor Department said in a release Thursday.

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This story originally appeared on The Epoch Times

The brisk economic recovery has driven down the number of American workers seeking unemployment benefits, which last week fell to a pandemic-era low of 385,000, although the number remains historically elevated.

Initial filings for unemployment insurance, a proxy for layoffs, came in at 385,000 for the week ended July 31, a drop of 14,000 over the previous week’s revised level, the Labor Department said in a release (pdf) Thursday.

While the drop in initial jobless claims reflects the dynamics of a rebounding economy, the number of last week’s filings is nearly twice as high as the pre-pandemic weekly average of around 220,000, suggesting the labor market still has a ways to go in its recovery.

“It was about a year ago when new claims first fell below the 1 million level for the first time after the pandemic began. In total, some 12.9 million Americans continue to receive some form of jobless assistance, which remains historically elevated,” said Bankrate senior economic analyst Mark Hamrick, in an emailed statement to The Epoch Times.

Some Republicans and economists have blamed generous unemployment benefits—in particular the federal pandemic jobless compensation boost—for sidelining workers by discouraging them from taking jobs.

“With jobless claims remaining high, the administration must reexamine their policies holding the economy back & prioritize getting Americans back to work,” Sen. Jim Risch (R-Idaho) said in a statement.

American businesses posted a record 9.2 million job openings in May, faster than applicants are showing up to fill them. In the face of business hiring difficulties, some two dozen states have moved to end early their participation in the extended federal unemployment programs.

While the resurgence in COVID-19 infections—driven by the Delta variant of the CCP (Chinese Communist Party) virus—poses a risk to recovery, there is no sign yet of any impact.

“While the Delta variant has sparked a rise in COVID cases, there’s scant indication this is translating to a measurable reduction in economic activity in the U.S. so far, suggesting little meaningful impact on employment,” Hamrick said.

While economic output has fully bounced back to its pre-pandemic levels, the labor market recovery is trailing. After shedding 22.4 million jobs in the first two months of the pandemic, the U.S. economy has recovered around 15.6 million jobs since May of last year.

The Labor Department’s jobless claims release comes ahead of the closely watched nonfarm payrolls report due Friday, which will show how many jobs U.S. employers added in July. Economists polled by Reuters predict that nonfarm payrolls rose by 870,000 jobs in July, after the economy created 850,000 jobs in June.

Reuters contributed to this report.

By Tom Ozimek

 

Tom has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The best writing advice he's ever heard is from Roy Peter Clark: 'hit your target' and 'leave the best for last.'

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