According to the latest report from the Department of Labor, 360,000 Americans submitted new claims for unemployment benefits in the week ending on July 10, – 26,000 lower than the revised number for the previous week. The print was slightly above market expectations for 350,000 new filings.
3,241,000 people continued collecting payments in the week ending July 3, down from 3,339,000 in the previous week. This was the lowest level for insured unemployment since the beginning of the pandemic.
In the week ending June 26, 96,362 people submitted initial claims for Pandemic Unemployment Assistance. More than 13.8 million people are collecting jobless benefits under all government programs.
Emergency unemployment aid programs were cut in twelve states: The drop-off in pandemic-related unemployment benefits was likely caused by the states that opted for an early exit from the extraordinary welfare programs. Next week’s print could see a bigger fall off, as the expiration of added benefits in states like Texas, Florida, Ohio, and Georgia roll into the data.
The Federal Reserve believes the economy still needs monetary support: In yesterday’s Congressional testimony, Chair Jerome Powell said the job market was “still a ways off” the levels needed to justify a tapering in bond purchases.
But July’s payrolls could change some minds: Because the June jobs report did not reflect the actual impact of lost benefits – although it may have included some workers who were anticipating losing extra compensation – the data to be released on August 6 could show whether enhanced unemployment payments have been keeping jobseekers at bay.
Hector Demarco – Currency Strategist, email@example.com
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