The number of new applications for unemployment benefits fell 14,000 last week to 340,000, the Labor Department reported on Thursday.
Thursday’s jobless claims number was less than forecasters’ expectations of 345,000. It was also lower than the week before, which saw 354,000 new claims.
The report was much anticipated as it is the last one before the sunset date on the expanded federal unemployment benefits that provide $300 per week on top of what beneficiaries receive from their home states. A little over half the states ended the program early, but large states such as New York and California did not.
Republicans and some economists have made the argument that labor shortages have been caused by the benefits, which can equate to more than double the federal minimum wage. They contend that the unemployed may be turning down jobs in order to collect the payments without working.
The Thursday report also comes one day before August jobs data is released. The delta variant of COVID-19 surged across the country during the month of August, causing some companies to delay reopening for in-person work, travel plans to be canceled, and new restrictions to be implemented in some parts of the country.
If the August report is better than anticipated, it would be a sign that despite the new wave of infections, the economy is still on track for a robust recovery. But if it is much worse than expected, it could show the toll that the pandemic is still taking on the job market and signal a slower economic recovery.
The July jobs report beat expectations with 943,000 new jobs and a decline in the unemployment rate from 5.9% to 5.4%. The consensus among forecasters is that 750,000 jobs will be added, and the unemployment rate will fall to 5.2%.
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Original Author: Zachary Halaschak
Original Location: New jobless claims fall to 340,000 as economy recovers