WASHINGTON: The number of Americans seeking unemployment benefits dropped below one million last week for the first time since the start of the COVID-19 pandemic in the United States, but that was likely as the expiration of a US$600 weekly supplement discouraged some from filing claims.
That was the lowest level since mid-March when authorities started shutting down non-essential business to slow the spread of the novel coronavirus. Economists polled by Reuters had forecast 1.12 million applications in the latest week. The government reported last week that the economy created 1.763 million jobs in July after adding a record 4.791 million in June. It has regained only 9.3 million of the 22 million jobs lost between February and April.
The remaining US$300 will be funded from a limited emergency disaster relief program, which economists estimated could be depleted as early as September. Top White House economic adviser Larry Kudlow said this week Trump's plan would provide an extra US$300 per week. While the loss of the supplement might have helped to push weekly jobless claims down, economists estimate it will reduce household income by roughly US$75 billion per month, which will weigh on consumer spending and cause struggling companies to lay off workers. A government-funded program offering businesses loans to help with wages has also lapsed.