Economic Indicators

Initial Jobless Claims Drop to 1.18 Million Last Week

imageEconomic Indicators13 hours ago (Aug 06, 2020 08:34AM ET)

(C) Reuters.

By Noreen Burke

Investing.com — The number of Americans applying for initial unemployment benefits fell to 1.186 million last week, after two straight weeks of increases, amid concerns the recovery in the labor market is losing momentum amid a resurgence in Covid-19 cases.

The number is the lowest weekly total for initial claims since late March, when layoffs around the country exploded due to lockdown orders. Economists had forecast a more modest decline to 1.415 million.

The Labor Department’s data also showed a big drop in the number of people making an initial claim for Pandemic Unemployment Assistance benefits, which fell by over 253,000 to just under 656,000 last week.

The number of continuing claims, which are reported with a one-week lag to initial claims, decreased to 16.107 million, the lowest since late April. The previous week’s figure was also revised downwards to 1.951 million. However, the overall number of people claiming for unemployment assistance – including two specific programs related to the pandemic – rose by nearly half a million to 31.31 million.

The data comes as Congressional Democrats and White House officials continue talks to reach a compromise on a new coronavirus relief bill, but the two sides remain sharply divided on several issues including the size of a federal benefit for tens of millions of unemployed Americans.

Investors were looking ahead to the Labor Department’s more comprehensive nonfarm payrolls report for July on Friday.

That report is expected to show 1.6 million jobs were added last month, slowing sharply from a record 4.8 million in June. The report covers the period through mid-July, before containment measures were reintroduced in some states in the second half of the month.

Data from payrolls processor ADP on Wednesday showed that U.S. private sector hiring increased by just 167,000 in July, falling far short of forecasts for 1.5 million jobs to be added. However, ADP also revised its estimate of job gains in June sharply higher.

Initial Jobless Claims Drop to 1.18 Million Last Week

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