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The latest data from the US Department of Labor shows a decline in new unemployment benefit applications, indicating progress in the economic recovery from the ongoing COVID-19 pandemic. While the situation is far from resolved, there is a sense of normalcy returning, allowing businesses to operate more safely, which is being reflected in the job market.
For the week ending July 10, new claims nationwide fell to around 360,000, marking a decrease of approximately 26,000 from the previous week. These figures align with forecasts made by analysts at the Wall Street Journal. Despite the drop from the peak in March and April 2020, the current numbers are still significantly higher compared to pre-pandemic levels when claims hovered around 200,000.
Gus Faucher, chief economist at PNC Financial Services, noted, “Initial claims are gradually decreasing as layoffs slow down, but they are still well above pre-pandemic levels.” He added, “Around 14 million individuals are currently receiving some form of unemployment benefits, a stark increase from the pre-pandemic figure of 2 million.”
BREAKING: The number of Americans applying for unemployment benefits has reached its lowest level since the pandemic struck last year, as jobless claims fell by 26,000 last week to 360,000. The U.S. economy and job market are quickly rebounding. https://t.co/3J2D4RczG5
— The Associated Press (@AP) July 15, 2021
During the peak of the pandemic, many individuals either lost their jobs or voluntarily left due to safety concerns. Now, businesses are facing challenges in filling the surplus of available positions. Some people are opting to stay home out of fear of contracting the virus, while others are prioritizing family time, especially with remote learning still in place for some children. Surveys indicate that about 1.8 million Americans are not working because enhanced unemployment benefits provide them with better income than their previous jobs, prompting efforts from businesses and policymakers to phase out these benefits early and incentivize a return to work instead of raising the minimum wage.
