Initial unemployment insurance claims filings dropped again last week, both here in Washington and nationally, as concerns continue to mount regarding the economic impact of rising COVID-19 cases.
The state Employment Security Department reports,
During the week of July 18 – July 24, there were 4,554 initial regular unemployment claims (down 10.0 percent from the prior week) and 311,097 total claims for all unemployment benefit categories (down 1.5 percent from the prior week) filed by Washingtonians, according to the Employment Security Department (ESD).
- Initial regular claims applications are now 84 percent below weekly new claims applications during the same period last year during the pandemic.
- The 4-week moving average for initial claims is at 5,257 (as compared to the 4-week moving average of initial claims pre-pandemic of 6,071 initial claims). That level represents the lowest levels of initial claims for regular benefits since the onset of the COVID-19 pandemic last year, and the seventh consecutive week initial claims have reached a new pandemic low.
- Initial claims applications for regular benefits, Pandemic Unemployment Assistance (PUA), Pandemic Emergency Unemployment Compensation (PEUC), as well as continued/ongoing claims for all benefits, decreased over the week.
- Decreases in layoffs in Construction and Health Care and Social Assistance contributed to the decrease in regular initial claims last week.
In The Seattle Times, Paul Roberts writes,
That was not only the smallest number of new claims filed since the start of the pandemic in March 2020 — it was also well below the number of claims filed during the weeks before last year’s first big layoffs from COVID-related business closures..
But the good news comes as the state and nation brace for a surge in COVID cases that could complicate the recovery.
Nationally, the U.S. Department of Labor reports a similar decline in claims filings.
In the week ending July 24, the advance figure for seasonally adjusted initial claims was 400,000, a decrease of 24,000 from the previous week’s revised level. The previous week’s level was revised up by 5,000 from 419,000 to 424,000.
The Associated Press also reports that the UI claims drop occurs as concern is rising about the effect COVID-19 may have on the recovery.
The weekly applications have fallen more or less steadily this year — from a peak of 904,000 in early to January. But they remain high by historic standards: Before COVID struck the United States in March 2020, claims were coming in at about 220,000 a week.
The job market and overall economy have been recovering from the collapse of the spring of 2020. The rollout of vaccines this year has encouraged businesses to reopen or expand their hours and sent cooped-up consumers back out to visit restaurants, bars and shops.
Still the health crisis isn’t over. COVID-19 cases are ticking up as the highly contagious delta variant spreads among the unvaccinated. The United States is reporting an average of more than 50,000 new cases a day, up from fewer than 12,000 a day in late June. The increase in cases could have economic consequences if governments decide to restrict business activity again or if consumers choose to stay at home as a precaution.
Economists express cautious optimism,
“Beyond weekly ups and downs, the trend in total filings should remain downward over coming weeks,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics, wrote in a research report. “ Overall, job growth should pick up and labor shortages should ease as near-term constraints – virus concerns, child-care issues and enhanced unemployment benefits – diminish. But rising virus cases could be a headwind for the labor market and the economy.”
Progress on a bipartisan infrastructure deal in Congress may help offset the headwinds in the longer term. But the virus continues to exercise a significant influence on the state and national economies.
