First-time claims for unemployment insurance fell to 963,000 for the week ending August 8, according to the Department of Labor, a sign that the labor market is recovering from the effects of the coronavirus pandemic.
It's the first time since March 14, the week wide-scale shutdowns began, that there were fewer than 1 million initial claims. There had been more than 1 million per week for 20 straight weeks. Earlier this year, prior to the pandemic, there had been slightly over 200,000 per week.
While the decline in initial claims is encouraging, continuing claims, those for people collecting benefits for at least two weeks, totaled 15.5 million for the week ending August 1. This was a decrease of 604,000 from the week before, but still well above pre-pandemic levels, which averaged around 1.7 million.
The numbers above, which are widely reported every week as a measure of the health of the labor market, are seasonally adjusted. According to the Bureau of Labor Statistics, "seasonal adjustment is a statistical technique that attempts to measure and remove the influences of predictable seasonal patterns to reveal how employment and unemployment change from month to month."
Over the course of the year, the size of the labor force and levels of employment fluctuate due to seasonal events that follow mostly the same pattern every year. Removing these variables makes it easier to see trends and movements in the data month to month.
The weekly numbers also only include claims filed through the states' regular unemployment insurance systems. Those receiving benefits through the federal government's temporary programs enacted as part of the CARES Act in March are not included in these figures. These programs include the Pandemic Unemployment Assistance program, which is for workers not typically eligible for state benefits, like freelancers and gig workers, and the extension of regular benefits for an additional 13 weeks.
Video by David Fang
So while the reported numbers of claims for the week ending July 25 was about 18 million, the actual total number of people receiving unemployment benefits was 28.3 million. Although that represented a decrease of more than 3 million from the prior week, it means that millions of Americans were still collecting unemployment insurance when the supplemental benefits of $600 per week expired on July 31.
President Donald Trump signed an executive order extending these benefits at a reduced level of $400 per week (later revised to $300 per week). However, experts say the extra benefits might not actually be paid and many unemployed Americans may not qualify.
Additional aid could eventually come from Congress, but the two parties are currently in a stalemate and both chambers are in recess until September.
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