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PNC Chief Economist Gus Faucher: Initial UI Claims Fall in Early August;

pncfsg CroppedBig Drop in Total Number Receiving Benefits

  • Initial claims for unemployment insurance fell somewhat in the week ending August 7, to 375,000. Initial claims have been around 400,000 per week since June.
  • There were more than 12 million people receiving some form of unemployment insurance benefit in the week ending July 24, down by 900,000 from the previous week.
  • The labor market continues to recover, with a very strong July jobs growth. Continued strong job growth will depend on unemployed workers reentering the labor market.

Initial claims for unemployment insurance fell by 12,000 in the week ending August 7, to 375,000. Claims for the previous week were revised slightly higher, to 387,000 from 385,000. The four-week moving average of claims, which smooths out some of the week-to-week volatility, rose by 1,750 in the week ending August 7, to 396,250.

Initial claims have been around 400,000 per week since June. This is lower than they’ve been since the pandemic came to the U.S. but is still about double their pre-pandemic level. Initial claims jumped from 200,000 per week in early 2020 to more than 6 million in April of last year as the pandemic came to the U.S. They then fell quickly to around 900,000 per week by early August, then stabilized at between 700,000 and 900,000 between August and March. In the spring claims fell gradually but steadily to around 400,000 per week, where they have been for the last couple of months.

New filings for UI benefits under the Pandemic Unemployment Assistance program rose to 105,000 in the week ending August 7, from 94,000 the previous week (not seasonally adjusted). Initial claims under PUA have been running at around 100,000 per week during the summer.

There were a total of 12.055 million people receiving some form of unemployment insurance benefit, including pandemic-related benefits, in the week ending July 24 (not seasonally adjusted). This was down from 12.975 million the previous week. The total number of beneficiaries fell to its lowest level since April 2020, as the pandemic was starting to wreak havoc on the U.S. economy. But it is still many times the approximately 2 million weekly continued claims in early 2020, before the pandemic. Total continued claims peaked at 33.2 million in June 2020

Continued claims under regular state programs were 2.866 million in the week ending July 31, down 114,000 from the previous week. This is the lowest level for continued claims since before the pandemic, and down from a peak of more than 23 million in May 2020. But continued claims are well above their pre-recession level of around 1.7 million, and the pace of improvement has slowed in 2021. With most people receiving benefits via pandemic-related programs, regular state continued claims have become less important as a labor market indicator.

The PNC Financial Services Group, Inc. is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. For information about PNC, visit www.pnc.com.

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