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Economic Report: U.S. unemployment claims fall to 375,000 and return near pandemic low as economy fends off delta variant

The numbers: New applications for U.S. unemployment benefits fell in early August to close to a pandemic low, signaling that fewer people are losing their jobs despite another surge in coronavirus cases.

Initial jobless claims dropped by 12,000 to 375,000 in the week ended Aug. 7, the government said Thursday. That matched the forecast of economists polled by The Wall Street Journal, a sister publication of MarketWatch.

New claims had fallen to a pandemic low of 368,000 last month before a temporary increase that was likely tied to seasonal swings in summer employment.

Big picture: The delta strain of the coronavirus doesn’t appear to have thrown a rapidly recovering U.S. economic recovery off course.

Last week the government reported that nearly 1 million new jobs were created in July. And a separate report showed that layoffs recently fell to an all-time low.

To be sure, the renewal of some government restrictions and fear of the coronavirus could cause parts of the economy to stutter in late summer. Yet most vaccinated people appear well protected from the delta variant of coronavirus and the number of people getting a shot is on the rise again.

Read: Inflation is still running high – and it doesn’t look like it will fade fast soon

Businesses, for their part, have continued to adapt to the virus and minimize the disruptions.

Key details: New claims were little changed in most states. They fell the most in New Mexico while California and Michigan posted the biggest increases.

The number of people already collecting state jobless benefits, meanwhile, slid by 114,000 to a seasonally adjusted 2.87 million. These so-called continuing claims are now at a pandemic low.

Altogether, some 12.1 million people were reportedly receiving benefits through eight separate state or federal programs as of July 24. That’s also a new pandemic low.

The number of people receiving compensation is expected to fall sharply in September once extra federal benefits for the unemployment benefits put in place during the pandemic expire.

Total claims averaged less than 2 million a week before the viral outbreak.

What they are saying? The total number of people relying on some form of government support continues to decline,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “Filings are elevated but are moving in the right direction and will drop off further as supplemental benefits expire completely in early September.

Market reaction: The Dow Jones Industrial Average
DJIA,
-0.26%

and S&P 500
SPX,
-0.10%

were set to open slightly higher in Thursday trades.

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