Though still significant, the number of claims is slightly better than anticipated.
Americans are making efforts to go back to their regular work routines amidst the ongoing impact of the COVID-19 pandemic. However, many public workplaces remain categorized as technically unsafe due to the pandemic’s persistence. As a result, individuals are either facing closures mandated by their employers or are apprehensive about returning to hazardous environments, leading to continued applications for unemployment benefits.
The most recent data indicates that there have been 1.314 million filings for unemployment benefits in a week. While this figure remains high and concerning, it fares slightly better than the expected numbers. Projections from Dow Jones forecasted around 1.39 million claims, making the actual figures slightly lower than anticipated. The number of claims has also dropped from the prior week by 99,000, according to the US Department of Labor. The four-week average has also softened to about 1.43 million claims. Continuing claims have shown a slight decrease as well, falling by 698,000, from the 18.06 million reported the previous week, which was already down by 530,000 from the week before. This trend outperforms predictions, as continuing claims were estimated to be around 18.9 million.
Unfortunately, while this indicates a minor improvement, it underlines the broader issue of persistently high unemployment levels. Unemployment claims have surpassed 1 million for the last 15 consecutive weeks, a period exceeding three months. Specifically, claims for Pandemic Unemployment Assistance (PUA) have also risen by 42,000 to reach 1.039 million.
Liz Ann Sonders, chief investment strategist at Charles Schwab, emphasized the need for caution, stating, “We still have a long road ahead of us. These numbers are certainly positive, but challenges persist and progress may be gradual.”
With the expiration of financial aid under the CARES Act approaching at the end of July, experts anticipate potential disruptions unless the benefits are extended. The termination of the additional $600 payment for those on unemployment raises concerns about the impact on individuals currently receiving the supplement.
