Jobless Claims Are Down, But The Labor Market Improvement Is Stagnating

Initial jobless claims were down by 14,000 to 385,000 during the week ending July 31, and the insured unemployment rate was at 2.1%, according to the most recent Department of Labor report. Jobless claims have continued to drop, but the improvement appears to be slowing.

“Jobless Claims (are) at 385,000 which is not exactly what one might call substantial further progress,” RSM economist Joe Brusuelas tweeted Thursday morning. “(It) looks like claims are stalling out at elevated levels.”

Those slowing numbers aren’t too much of a concern for Mark Hamrick, senior economic analyst at Bankrate. He said he sees no connection between the delta coronavirus variant and the unemployment rate.

"The weaker-than-expected increase of 330,000 in private payrolls reported by ADP raises worry that the July employment report from the Labor Department could also fall short,” he wrote in an email. “Even so, with schools opening, vaccinations still on the rise, and the forthcoming expiration of elevated unemployment benefits, the way should be cleared for more employment gains in the coming months.”

Meanwhile, the S&P 500 has remained strong. Brusuelas is optimistic that positive trends will continue, as he expects the net increase in employment to top 950,0000 when the Bureau of Labor Statistics releases its jobs report Friday.

Photo: Unsplash photo by Leon.