Jobless Claims Keep Improving, but Still Atrocious

The U.S. Department of Labor has released its jobless claims report for the week ending August 1. Initial jobless claims fell to 1.186 million last week. The report was better than the 1.42 million that had been published by the Wall Street Journal, and it was actually the lowest number of claims since the COVID-19 pandemic forced the economy into a shutdown.

Wall Street already had seen a weak payrolls report from ADP this week, and the tone is still a bit more cautious ahead of Friday’s unemployment report.

The prior week’s report was revised up by only 1,000 to 1,435,000. A drop was also seen in the four-week moving average, falling by 31,000 to 1,337,750 from the previous week’s revised level.

One bright spot was in the continuing claims. This comes with a one-week lag, but those who have been taking benefits for two weeks or more fell by 844,000 to 16.1 million. The prior week’s report on continuing claims was also revised lower by 67,000 to 16,951,000. The advance seasonally adjusted insured unemployment rate was down 0.6 points to 11.0% for the week ending July 25.

It was good to see that this round of jobless claims looking much better than expected. That said, the damage has been significant in the jobs market, and this was the 20th consecutive week in which weekly jobless claims have been above a million.

Another consideration about this report is that the data is all now more than two weeks after the cut-off date (reference week) for the July unemployment and payrolls report that is due on Friday morning.