The number of people initiating claims for unemployment insurance fell last week, but still remained twice as high as it was before the recession began in February of 2020.
First-time claims for unemployment benefits dropped to 400,000 in the week through July 24, a decline of 24,000 from the previous week’s revised level, according to seasonally adjusted data released Thursday by the Labor Department. The decrease was a disappointment as economists were expecting a larger drop, according to a consensus estimate of 371,583 cited by Moody’s Analytics.
The downward movement brought weekly claims closer to their pandemic-era low of 368,000, hit twice this summer. Still, progress toward the pre-pandemic level of 210,000 has stalled in recent weeks, with claims hovering around the 400,000 mark since mid-May. The slow movement comes in contrast to momentum built in the spring, when the weekly volume of claims dropped by half after being stuck at four times that pre-pandemic level or higher for a year.
The job market is still on track to fully recover over the next year, Moody’s Analytics senior director Ryan Sweet wrote in a commentary Thursday. But he cautioned that cold weather, the pandemic, and vaccine hesitancy could prevent consumers from spending, delaying the recovery some.
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