The number of Americans filing new claims for unemployment benefits fell below 1 million last week for the second time since the Covid-19 pandemic started in the United States, but that does not signal a strong recovery in the labour market.
"There are new seasonal adjustment factors this week which brings down the joblessness slightly," said Chris Rupkey, chief economist at MUFG in New York."The labour market looks just as bad as it was and it will be a miracle if economic growth can continue at such a fast clip during this recovery if it has to drag along millions and millions of workers without paycheques."
Unadjusted claims rose 7,591 to 833,352 last week. The increase in the raw numbers, which many economists prefer to focus on, added to a raft of data suggesting the labor market recovery was ebbing. Another report on Thursday showed job cuts elevated in August amid layoffs by airlines. United Airlines said on Wednesday it was preparing to furlough 16,370 workers on Oct 1.
The claims report also showed the number of people receiving benefits after an initial week of aid dropped 1.238 million to 13.254 million in the week ending Aug 22. Part of the decrease in so-called continuing claims was likely because of people exhausting eligibility for benefits.