New weekly jobless claims drop below 1 million for the first time since the start of the pandemic

For the first time since early March — or nearly 5 months — the number of Americans filing for first-time unemployment benefits last week dropped to under 1 million, according to Department of Labor statistics.

What are the details?

The Labor Department news release, posted Thursday morning, recorded 963,000 weekly initial jobless claims, a figure that beat economists' predictions of 1.1 million.

CNBC reported the figure as "a sign that the labor market is continuing its recovery from the coronavirus pandemic."

"In the week ending August 8, the advance figure for seasonally adjusted initial claims was 963,000, a decrease of 228,000 from the previous week's revised level," the news release said, adding: "The 4-week moving average was 1,252,750, a decrease of 86,250 from the previous week's revised average."

Image Source: Department of Labor

The new report marked the end of a 20-week streak in which the new weekly jobless claims topped 1 million as many Americans were put out of work due to the coronavirus pandemic and resulting lockdowns.

Jobless claims reached a peak in late March, when a whopping 6.6 million Americans filed for first-time unemployment benefits. Since then, the number has been dropping steadily.

Yet while the steady decline in new weekly jobless claims is promising news for the economy, it's important to keep in mind that prior to the pandemic, weekly jobless claims consistently came in below 250,000.

What else?

CNBC found that the number of continued claims, which describes those collecting unemployment benefits for at least two weeks, decreased, as well, for the week ending August 1. That number dropped to approximately 15.5 million, its lowest level since mid-April.

Some economists say the pair of decreases may also be fueled by the fact that federal enhanced unemployment benefits in the form of a $600 weekly check have been suspended since the end of July.

"We cannot be sure or not if this is good news for the recovery or whether it is the lapse in those $600 weekly checks from the federal government that is now a disincentive for some newly jobless workers to file," said Chris Rupkey, chief financial economist for MUFG Union Bank, according to Yahoo News.

"Any way you look at it, the party may be over for those getting government assistance after being made redundant after this recession," he added.