Jobless claims fall to new pandemic low despite delta variant concerns

The number of Americans filing new jobless claims once again plummeted to a pandemic-era low last week amid an increase in delta variant cases in the country.

The Labor Department said Thursday that layoffs, decreased by 29,000 to a seasonally adjusted 348,000 in the week ending Aug. 14 than the prior week. That was the lowest number of claims since the pandemic began in the United States in March 2020.

Last week, the four-week moving average, which smooths down frequently erratic data, plummeted to 377,750, a new pandemic low. New unemployment claims have decreased for four weeks in a row and are down more than 50% since January, WSJ reported.

The last time claims were this low was March 14, 2020, shortly before the Covid-19 pandemic outbreak, which plunged the United States into its worst but briefest recession on record.

Since late May, claims have been hovering between 368,000 and 424,000, while they appear to be higher than the pre-pandemic average of around 220,000, economists expect it to fall as the recovery accelerates.

The most recent claims figures are consistent with other data that reflect a robust labor market. According to the Labor Department, employers created 943,000 positions in July, the most in 11 months, and job vacancies hit a record high at the end of June. 

There are some signs, however, that the economic boom is slowing. According to the Commerce Department, retail sales decreased 1.1percent in July compared to June while the University of Michigan's consumer sentiment poll dipped considerably in the first part of August, as many respondents expressed worries about the Delta variant.

With the national program set to expire next month, investors are keenly eying the state of the labor recovery. Meanwhile, the Federal Reserve officials lookout for the labor recovery report to decide on whether to let inflation increase to bring back jobs lost during last year’s shutdowns.