The number of Americans who filed for jobless claims fell to its the lowest number since the pandemic began in March, better than analysts' expectations, according to the latest data from the U.S. Department of Labor (DOL) on Thursday (Sept. 3).
For the week ending Aug. 29, the advance figure for seasonally adjusted initial claims was 881,000, a decrease of 130,000 from the previous week’s revised level.
The total number of people claiming benefits for the week ending Aug. 15, the most recent data available, was 29.2 million, up 2.2 million from the previous week. During the same week one year ago, 1.6 million Americans were collecting unemployment benefits.
The DOL said it changed the way it adjusts claims data to account for seasonal variation. While that should make the reports more accurate in the weeks to come, it also means the reported change from the previous week is not an apples-to-apples comparison.
“The numbers are better than expected and that’s a good thing, and the stock markets are right to react favorably,” Mohamed El-Erian, Allianz’s chief economic adviser, told CNBC.
Analysts had predicted that 950,000 Americans would likely file for first-time unemployment insurance benefits last week, while the number of workers newly put out of work during the pandemic remains stubbornly high.
To put the most recent data in context, Mark Hamrick, senior economic analyst for Bankrate, said new claims were as high as 6.8 million in late March, while the highest number seen before the pandemic was 695,000 in October 1982.
“In some ways, the economy is now engaged in a tug of war. On one side, the housing market, auto sales, ascendant stock market and resurging manufacturing are flexing strength. On the other, the leisure and hospitality, aspects of retailing, travel-related, energy, agricultural and commercial real estate and construction sectors are struggling,” he noted.
The largest decreases in claims for the week ending Aug. 22 were in Florida (21,127), where there were fewer layoffs in the construction, manufacturing, retail and service industries. Texas saw 9,248 fewer claims, New Jersey (-5,235), Virginia (-3,715) and North Carolina (-3,708), where there were fewer job losses in the accommodation and food services sectors.
In contrast, the largest increases in initial claims were in California (+6,562), Illinois (+3,856, with increased layoffs increased in the manufacturing, wholesale and retail industries), Pennsylvania (+1,926, as layoffs grew in the manufacturing, accommodation and food services, and construction sectors), Kansas (+1,061) and Rhode Island (+503).
The DOL figures follow Wednesday’s ADP National Employment Report, which reported that private-sector employment improved by 428,000 jobs in August. That’s up over the previous month’s 167,000 jobs, but still well below expectations. A survey of economists by Dow Jones had predicted a 1.17 million increase.