The Labor Department reported that unemployment claims, which are a proxy for layoffs, fell to 399,000 last week. Since January’s peak of 900,000.00 applications, the number has been steadily declining. They are still high compared to historical levels. Before the pandemic that ravaged the United States in March 2020 they averaged around 220,000 per week.
The U.S. economy has rebounded since the fall of the stock market in 2020. The rollout of vaccines encouraged businesses to reopen, or return to their normal hours, and consumers to go back to bars, shops, and restaurants. According to FactSet’s survey of economists, the United States has been adding nearly 540,000 jobs per month since the start of the year. The Labor Department’s July Jobs Report will be out Friday.
The U.S. still has 6.8 million fewer jobs than it did in February 2020.
Companies have posted record numbers of job openings in May, averaging 9.2 million. This is faster than the number of applicants who are turning up to fill them. Numerous states have responded to complaints from businesses about a labor shortage by ending federal unemployment benefits. These benefits were meant to alleviate financial strains resulting from the health crisis. They also offer an additional $300 per week in state benefits. The federal benefits will end nationwide on Sept. 6.
In total, 13 million Americans received some form of unemployment assistance in the week ending July 17, a drop of 13.2 million from the previous week and 32 millions a year ago.
The health crisis isn’t over. As the highly contagious delta variant spreads among unvaccinated people, COVID-19 is on the rise. In the United States, there are now more than 70,000 cases per day. This is an increase from the 12,000 cases in June.
The increase in cases so far has not had any economic effects. “The increase in Covid cases due to the delta variant is not expected to cause a new spike in unemployment as there have been very few shutdowns thus far,” Contingent Macro Advisors stated in a research paper.
