The number of people initiating claims for unemployment insurance dropped for a second straight week, another small step in the job market’s uneven recovery from the pandemic recession.
Initial claims for unemployment benefits declined to 385,000 in the week through July 31, a decrease of 14,000 from the previous week’s revised level, according to seasonally adjusted data released Thursday by the Labor Department. The decrease was about what economists expected, according to a consensus estimate of 386,049 cited by Moody’s Analytics.
The drop draws claims closer to their pandemic-era low of 368,000, hit twice this summer. Progress toward the pre-pandemic level of unemployment benefit claims (210,000) has mostly stalled the last few months, with claims hovering around the 400,000 mark since mid-May. The slow movement has come in contrast to the spring, when the weekly volume of claims dropped by nearly half in a matter of weeks after being stuck at four times that pre-pandemic level or higher for a year.
The stilted job market recovery has hamstrung the economy somewhat, with economists saying that the rapid economic growth we saw in the first two quarters of 2021 could have been even more robust if not for a shortage of supplies and an abundance of unfilled jobs. The issues holding people back from taking jobs should fade in the coming months as schools reopen and more people get vaccinated, Moody’s Analytics senior director Ryan Sweet wrote in a commentary Thursday. Moody’s forecasts that the economy will gain back all the jobs it lost in early 2020 by the second half of 2022, but factors like the delta variant could hamper the recovery.
We’ll find out how much progress the job market made in July on Friday, when the federal government releases its monthly employment report. Oxford Economics projects the report will show that the U.S. added more than 1 million jobs last month, the most since last August.
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