U.S. Jobless Claims Rise But Hold Near Pandemic Low

Jobless claims ticked up slightly but remained near a pandemic low last week, a sign the job-market recovery remains on sound footing despite uncertainty surrounding the Delta variant of Covid-19.

Unemployment claims edged up to 353,000 last week from a revised 349,000 a week earlier, the Labor Department said Thursday. That was the lowest level for claims since the coronavirus hit in March 2020.

The four-week moving average, which smooths out volatility in the weekly figures, fell to a new pandemic low of 366,500 last week.

Layoff GaugeWhile down from January, applications for unemployment benefits remain above pre-pandemic levels.Initial jobless claims, weeklySource: U.S. Employment and Training Administration via St. Louis FedNote: Seasonally adjusted.

Applications for unemployment benefits are down more than 50% since the start of the year. They have continued to fall this summer, despite a surge in the Delta variant that has resulted in rising Covid-19 cases and hospitalizations throughout the country.

“Even with the spread of the Delta variant, many people who are vaccinated feel more comfortable doing things than they did previously,” said Gus Faucher, chief economist at PNC Financial Services Group Inc. “Demand for labor remains very strong.”

Continuing claims for regular state programs, a proxy for the number of people receiving benefits, have also recently declined to pandemic lows. About 2.86 million people were collecting unemployment benefits through state programs in the week ended Aug. 14, down slightly from 2.87 million a week earlier and the lowest level since March 2020.

The claims figures are consistent with other data that indicate the job-market recovery is continuing. Employers added 943,000 jobs in July, the best gain in 11 months, according to the Labor Department, which also said job openings reached a record level at the end of June.

So far, state and local governments have resisted imposing strict limits on business activity, helping to minimize the Delta variant’s economic impact, according to economists.