The number of Americans filing new claims for unemployment benefits dipped to 340,00 in the week ended August 28, the Department of Labor reported Thursday.
Economists had forecast 350,000 new claims. The prior week’s claims were revised up by 1,000 to 354,000.
Although the economy was growing rapidly in the second quarter of the year, data from July and particularly August appear to indicate the economy slowing by more than expected in the second half of the year. That looks to be a response to the resurgence of the coronavirus thanks to the highly contagious delta variant and prices moving sharply higher, triggering a precautionary saving response by consumers and lowering demand for leisure services.
In the week ending on August 21, there were 2,748,000 continuing claims, a decrease of 160,000.
Analysts may have overestimated the impact of the Delta variant’s drag on employment. Although some high-frequency economic data shows a slowdown in the consumption of liesure services–airline travel is declining, restaurants reservations have declined in some areas, credit card data shows fewer discretionary purchases–some parts of the country that were hit early by the resurgent virus are already showing signs of recovery. Seated diners were up last week in Florida, for example.
Continuing claims remain stubbornly high, particularly because many employers report that they cannot find workers. There were 10.1 million unfilled jobs at the end of June, a record high. Rising delta infections may also be causing some Americans to hesitate to return to work. Others may be holding back from taking jobs out of fear that schools may not reopen or close again.