Knowledge • News • Insights

In Partnership With

Your marketing shouldn't be a hot mess. Let's fix it together.

PNC Senior Economist Abbey Omodunbi: Initial Claims Down 14,000 From Prior Week;

pncfsg CroppedContinuing Claims Fall to Pandemic Low

  • Initial claims for unemployment insurance fell to 385,000 in the week ending July 31, down from a downwardly revised 399,000 the previous week. 
  • The total number of beneficiaries fell to 12.975 million in the week ending July 17, down from 13.156 million the prior week. 
  • Labor market conditions will continue to improve through the rest of 2021.

Initial claims for unemployment insurance fell to 385,000 in the week ending July 31, down from a downwardly revised 399,000 the previous week. The four-week moving average of claims, which smooths some of the week-to-week volatility, edged down to 394,000 in the week ending July 31, down 250 from the previous week. 

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. But since the spring, claims have gradually but steadily fallen to around 400,000 per week. This is still about double their pre-pandemic level, however. 

Initial claims increased in the Pandemic Unemployment Assistance (PUA) program in the week ending July 31, to 94,476, from 93,060 the previous week (not seasonally adjusted). A total of 12.975 million people received some form of unemployment insurance benefit in the week ending July 17, down by over 180,000 from 13.156 million in the previous week (not seasonally adjusted). 

The PUA program covers individuals who are not eligible for other UI benefits, including self-employed workers, gig workers, and independent contractors. The Pandemic Employment Unemployment Compensation (PEUC) program provides eligible individuals with additional weeks of unemployment benefits when they have exhausted their regular UI claims. 

Continued claims under regular state programs fell to a pandemic-low 2.930 million in the week ending July 24, down 366,000 from the previous week. With most people receiving benefits via pandemic-related programs, regular state continued claims have become less important as a labor market indicator. The pandemic-related programs should be considered in tandem with the regular state benefits to get a fuller picture of the labor market. 

Labor market conditions continue to improve. Initial claims are averaging 392,000 in July after averaging 394,000 in June and 429,000 in May. The labor force participation rate remains near the 45-year low and many employers are complaining about worker shortages. Labor supply constraints will fade away as temporarily-increased benefits expire, and schools reopen in the fall. Over one-half of states have already dropped the extra pandemic-related benefits of $300 per week because of concerns that this is discouraging the unemployed from taking jobs. Initial claims will continue to decline, and labor supply issues will improve through the year. PNC forecasts a 700,000 increase in nonfarm payrolls in the July jobs report, including a 675,000 increase in the private sector. The unemployment rate likely fell to 5.7% in July from 5.9% in June. Employment will fall to around 5% by the end of this year and near 4% by the end of next year. Risks to the labor market outlook are weighted to the downside. The continued spread of the Delta variant could lead to additional government restrictions on economic activity.

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.

Image result for pnc financial services

What's Hot

Get the latest news from MBN right in your inbox

Sign up for our newsletter and never miss a beat.