Despite the latest rise in new COVID infections, the U.S. labor market continues to show signs of improvement. According to fresh data released by the Department of Labor on Thursday, initial jobless claims dropped to 348,000 in the week ended August 14, marking a new pandemic-era low. The latest reading comes on the heels of an encouraging July jobs report, showing that U.S. employers added 943,000 jobs last months, the biggest gain since August 2020.
Despite all progress, it must be noted that weekly jobless claims remain elevated, with the current level still the highest since 2013 when lookoing at the pre-pandemic era. After rapid and significant improvements in the labor market following the initial shock in March 2020, the recovery slowed down significantly, as businesses across the United States continued to lay off staff in the face of weak demand and continued restrictions. After hovering around 800,000 for months, jobless claims began to fall again in April, as the vaccination campaign sparked optimism across the country.
While the trend in initial claims is clearly positive, it only tells part of the story. According to the DOL, almost 12 million Americans still claimed unemployment insurance benefits in the week ended July 31. The data, which is released with a two-week delay, includes the soon-to-expire Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation. With more than 8 million Americans still relying on those two emergency programs alone, it's clear that the jobs crisis brought about by the pandemic in March 2020 is not entirely over yet.
