Continuing jobless claims hit new pandemic-era low, falling below 3 million

Initial claims for unemployment insurance edged lower last week, meeting Wall Street expectations, while longer-term unemployment signs showed improvement, the Labor Department reported Thursday.

First-time filings for benefits dipped to 385,000 for the week ended July 31, a decline of 14,000 from the previous week as the jobs market remains essentially in a holding pattern during the economic recovery. The total hit the Dow Jones estimate exactly.

The four-week moving average of claims, which smooths weekly volatility, was little changed at 394,000.

Claims have circled largely in a range around the 400,000 level since mid-May, with employment rising in Covid-hit sectors such as leisure and hospitality but changing little in some other key sectors including most goods-related industries.

However, continuing claims showed a sharp dip, according to data that runs one week behind the headline weekly number.

That level plunged by 366,000 to 2.93 million, the first time continuing claims have fallen below 3 million since March 14, 2020.

The slide in continuing claims came as the total of those receiving benefits under all programs fell to just below 13 million, a reduction of 181,251, according to data through July 17 that reflected a drop in those receiving extended benefits. A year ago, that number was just shy of 32 million as enhanced unemployment benefits were directed to those displaced by widespread business lockdowns.

The claims numbers come a day ahead of the closely watched July nonfarm payrolls report from the Bureau of Labor Statistics.

While the Dow Jones estimate for the month is 845,000, a report Wednesday from payroll processing firm ADP showing just 330,000 more private payrolls jobs could signal a disappointment for July.

The spreading Covid-19 delta variant has caused some areas to reimpose restrictions, though they primarily have been limited to mask mandates. Last week’s jobless claims numbers will not figure into the nonfarm payrolls count.

In other economic news Thursday, the U.S. trade deficit surged 6.7% to $75.7 billion, its largest on record for data going back to 1992.

A $1.2 billion increase in exports was more than offset by a $6 billion increase in imports, the Commerce Department reported.. The totals pushed the year-to-date imbalance to $135.8 billion, a 46.4% rise from the same period a year ago.