For the first time since the beginning of the pandemic, weekly unemployment claims fell below one million to 963,000. Of course, any improvement is good, but one month does not make a trend and there are troubling signs of a slowing economy just as we are coming out of the steepest economic decline in history.
Though the numbers are gradually falling, the report indicates workers are still being pushed out of their jobs at historic levels during the coronavirus pandemic.
New applications filed in state programs are still far above the previous record of 695,000 in 1982, fueling concerns that the economic recovery may not be fully under way.
In total, more than 25 million people are currently receiving jobless benefits, according to DOL.
That’s a large number, but there are other encouraging signs as well.
Nearly every state across the country reported a decline in new claims last week on an unadjusted basis. Florida’s new unadjusted jobless claims improved by 23,000 last week for the largest numerical drop of any state. New York state followed close behind, with 22,000 fewer new claims filed last week than the week before.
Meanwhile, continuing claims, which are reported on a one-week lag, also fell to a pandemic-era low of 15.486 million, dipping below 16 million for the first time during the pandemic period. This metric, which captures the number of individuals still receiving unemployment insurance benefits, has improved in seven of the last eight weeks’ worth of reports.
Is it a coincidence that the extended unemployment benefits ended two weeks ago and the number of unemployment claims is falling?
The total marks the second week of declines since a provision expired July 31 that gave unemployment insurance recipients an extra $600 a week on top of their normal compensation. Congressional leaders are debating an extension as President Donald Trump issued an executive order that would provide an extra $400.
The decline “provides some fuel for the argument that the enhanced benefits were providing an incentive for people to stay away from returning to work if they had the option,” Jefferies said in a note. “The data of the past two weeks will not help the arguments of lawmakers fighting to extend the expired benefits.”
Negotiations to restore that $600-a-week benefit are currently stalled, with Democrats still believing Republicans will be forced to cave on their $2 trillion-plus relief package.
Speaker Pelosi is holding firm on her demand that Trump spend more money than the trillion dollars Republicans are offering.
Mnuchin reached out to Pelosi by phone on Wednesday, a source familiar with the call said. In a joint statement, Pelosi and Schumer signaled they would not yet restart discussions after the Treasury secretary again rejected their offer to find a middle ground between the Democrats’ more than $3 trillion relief package and the GOP’s roughly $1 trillion proposal.
“We have again made clear to the Administration that we are willing to resume negotiations once they start to take this process seriously,” they added.
Mnuchin later said Pelosi’s comments were “not an accurate reflection of our conversation.” In his own statement, he said she “made clear that she was unwilling to meet to continue negotiations unless we agreed in advance to her proposal, costing at least $2 trillion.”
“The Democrats have no interest in negotiating,” Mnuchin said.
Democrats aren’t getting hurt by being obstructionists, so they figure why change? It’s clear that Pelosi thinks Trump will be forced to bend given his re-election difficulties and doesn’t feel any pressure from her caucus or the media.
Meanwhile, Republicans can’t even agree among themselves whether another stimulus package is even warranted. Democrats are taking full advantage of Republican disarray and by the end of the summer, will probably get everything they want.