For the first time since early March - or almost 5 months - the number of Americans filing for first-time unemployment benefits last week dropped to under 1 million, according to Department of Labor statistics. This metric, which captures the number of individuals still receiving unemployment insurance benefits, has improved in seven of the last eight weeks' worth of reports. The last time the number was below 1 million was March 14, when just 282,000 Americans filed for aid.
Economists were expecting initial claims of 1.1 million and continuing claims of 15.8 million, based on median estimates.
Thursday's jobless claims report also showed that the number of people receiving benefits after an initial week of aid, a metric known as continuing claims, fell from 16.09 million to 15.49 million in the week ending August 1.
Nationwide, 963,000 workers filed jobless claims, marking the first time in five months that the weekly total has dipped below the 1 million mark. Both were lows since the pandemic began, and total jobless claims were down more than 8% from a week earlier. Twenty-three states have paused or reversed their business re-openings. Continuing claims lag initial claims by a week. "There are anecdotal reports that some states are tightening the eligibility requirements for unemployment benefits where jobless workers need to aggressively search for new employment opportunities to receive assistance". It marked a second straight weekly decline following two consecutive weeks of increases, and it's the first time during the pandemic in which the number has been below 1 million. As Bank of Montreal economist Jennifer Lee put it, "Maybe there were more jobs available [or] maybe it was due to the expiration of the top-up in unemployment benefits".
For months, the unemployed had also been receiving the $600 a week in federal jobless aid on top of their state benefit.
The expiration of a $600 weekly jobless supplement at the end of July likely contributed to the decline in claims reported by the Labor Department on Thursday. On Tuesday, the Trump administration said it would cut the amount to $300 weekly after some states said they couldn't afford to pay their $100 share. Overall there were 28.3m people claiming benefits in state and federal programmes as of July 25, compared with 31.3m a week before, on an unadjusted basis. That figure isn't adjusted for seasonal trends, so it's reported separately.
The Labor Department's July jobs report last week showed the USA economy added 1.8 million payrolls for the month.