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Jobless claims reach fresh pandemic-era low of 348,000

Initial unemployment claims fell further last week to the lowest level since March 2020, bringing the level of weekly new filings closer to pre-virus levels.

The Labor Department released its weekly jobless claims report on Thursday at 8:30 a.m. ET. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:

Initial unemployment claims, the week ended August 14: 348,000 vs. 364,000 expected and a revised 377,000 during the prior week

Continuing claims, week ended August 7: 2.820 million vs. 2.800 million expected and a revised 2.899 million during the prior week

New weekly jobless claims posted a fourth straight weekly decline, coming in yet again below the psychologically important 400,000 level. But even with the drop, new weekly claims are still elevated compared to the period before the pandemic, with claims averaging just over 200,000 per week throughout 2019.

"Amid no shortage of quickly changing crosscurrents in the U.S. economy and beyond, one reliable constant has been continued improvement or stability in new claims for unemployment benefits, which are a proxy for layoffs," Mark Hamrick, Bankrate senior economic analyst, wrote in an email. "The major issue for employers hasn’t been an urgent need to shed workers. Rather, many have struggled to attract, find, hire, and retain the workers they want."

The four-week moving average for new claims, which smooths out some volatility in the data, also took a step lower. This came in at 377,750 for a drop of 19,000 from the prior week's level.

The total number of claimants across all programs, however, has remained elevated, albeit while coming down sharply from peak levels during the outbreak. For the week ended July 31, about 11.7 million Americans were claiming benefits across both state and federal unemployment programs. That sum was down by about 311,000 compared to the prior week, building on a drop of about 900,000 across all claimants a week earlier. The pace of declines has begun to accelerate as more states ended federal unemployment benefits early and ahead of their official September expiration date at the national level.

But for the millions still on the sidelines, the ongoing pandemic still plays a major role.

"A big factor continues to be COVID-19. So many of us, including myself, want to be done with the pandemic, but it's simply not over yet," Indeed economist AnnElizabeth Konkel told Yahoo Finance. "Child care is a factor, and we're particularly watching to see what happens with schools this fall. That's a huge wild card right there. Also, we have found at Indeed that some job seekers have a financial cushion, but we're waiting to see what happens with that. We are seeing that in the personal income and outlays data that that cushion may be wearing thin."

Other data on consumer sentiment and spending have recently disappointed, highlighting the increased concern over the Delta variant heading into the fall. The University of Michigan's headline consumer sentiment index slid to a 10-year low in early August, data last Friday showed. And this week's Commerce Department retail sales report showed a bigger-than-expected pullback in sales in July, with sales dropping 1.1% versus an only 0.3% dip expected.

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