U.S. weekly jobless claims decline, remain high than pre-pandemic levels

Jobless claims in the United States decreased marginally this week, as worker requests for new unemployment benefits, stabilized this summer at a level roughly above the pre-pandemic average.

The Labor Department said Thursday that initial jobless claims, a proxy for layoffs, decline by 14,000 in the week ended July 31 to a seasonally adjusted 385,000.

In July, claims remained relatively flat, with economists blaming California, which they claimed was ramping up efforts to clear its backlog of applications. This has contributed to claims remaining above, despite a reduction from a record 6.149 million in early April 2020.

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.

On Friday, the Labor Department will release the July employment report, which will indicate if hiring increased last month. According to economists surveyed by the Journal, 850,000 jobs were added last month, equal to the amount in June, and the unemployment rate decreased to 5.7 percent.

Though analysts do not anticipate the large-scale company shutdowns on the magnitude of those saw in 2020, the new variant of the coronavirus poses a risk to the economy. The business cycle date committee of the National Bureau of Economic Research stated that the pandemic recession, which began in February 2020, concluded in April 2020.

Though, the recent surge of coronavirus cases may intensify criticism of states that have terminated federal payments.

With inputs from WSJ