Unemployment Falls For 17th Consecutive Month

Unemployment claims continue to drop. That’s the storyline that has persisted for almost a year and a half since close to the start of the COVID-19 pandemic in the U.S. in March 2020.

What Happened: Seasonally adjusted unemployment insurance claims fell by 29,000 to 348,000 over the last week, according to Thursday’s U.S. Department of Labor report. The unemployment rate remained constant at 2.1% for the week ending on Aug. 7 and was unchanged for the week before that.

Why It Matters: The sign of a strong economy — including inflation that is stable and kept in check (at 2%, according to the Federal Reserve's goal) and a low unemployment rate — gives creditors more confidence in the economy, and thus more reason to invest. Borrowers naturally benefit from that situation as money is more freely accessible to the people who need it.

Many investors and economists took to Twitter Inc TWTR to rejoice.

“Another new pandemic low in US Jobless Claims, down 94% from their peak in April 2020,” tweeted Charlie Bilello, founder of Compound Capital Advisors.

Raymond James Chief Investment Officer Larry Adam was equally as excited by the numbers.

“Employment trucks on,” he tweeted. “Both initial and continuing jobless claims fell to record post-pandemic lows today as the labor market continues its comeback.

No less enthused was U.S. President Joe Biden, who didn’t miss the opportunity Thursday to leverage the new number as an endorsement of his administration’s progress.

“Today we learned the number of Americans filing initial unemployment insurance claims fell to the lowest level since the pandemic began,” he tweeted. “Average weekly claims have fallen by more than half to below 378,000. It reflects the important progress we’re making in our economic recovery.”

Photo: Patrick Tomasso via Unsplash