Wed, 11 Aug 2021

WASHINGTON, D.C.: While layoffs in the United States dropped to their lowest level in over 21 years in July, the number of Americans filing new claims for unemployment benefits also further declined last week.

Meanwhile, unemployment insurance claims remain above their pre-pandemic level of 256,000, though they have dropped from a record 6.149 million in early April 2020.

The decline in claims was led by California, which saw 256,370 people dropping off unemployment rolls.

Claims also fell in Florida, one of the states hardest hit by the current COVID-19 wave. There were also notable declines in applications in Texas, Pennsylvania, Michigan and Tennessee.

"The latest week's data was the first in the thick of rising Delta variant COVID-19 cases, and so far, that a rise in infections hasn't pushed up layoffs," said Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia, as quoted by Reuters. "Together with microdata, such as airline flights and restaurant bookings, it appears that for now, the economy is holding fast against the fourth wave of infections."

Still, the labor market recovery has a long way to go. About 12.975 million people were receiving unemployment checks under all programs in mid-July.

July's non-farm payroll estimate is highly uncertain, with labor market indicators mixed. In a separate report on Thursday, global outplacement firm Challenger, Gray and Christmas said job cuts announced by U.S.-based employers fell 7.5 percent to 18,942 in July, the lowest number since June 2000.

So far this year, employers have announced 231,603 job cuts, down 87.5 percent compared to the same period last year.

Data from Homebase, a payroll scheduling and tracking company, showed its employees working index rose moderately in July from June. The ADP employment report on Wednesday showed the smallest private payroll gains in five months in July.

That was, however, countered by two Institute for Supply Management surveys showing a rebound in manufacturing and services industries employment last month.

"Labor market churn will pick up further in the coming months, as the conditions in the labor market remain ripe for workers to seek better opportunities," said Dante DeAntonio, a senior economist at Moody's Analytics in West Chester, Pennsylvania, as reported by Reuters.

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