The number of new applications for unemployment benefits fell 12,000 last week to 375,000, the Labor Department reported on Thursday.
Thursday’s jobless claims number matched forecasters’ expectations.
The new numbers follow the July jobs report, which beat expectations with 943,000 new jobs and a decline in the unemployment rate from 5.9% to 5.4%.
The report is a “welcome improvement,” said Bankrate’s senior economic analyst Mark Hamrick.
“Of course, new claims reflect recent job loss, rather than the pace of hiring as such. The newly unemployed who are inclined to work should face generally positive prospects, an employment safety net, so to speak,” he said after the numbers were released.
Jobless claims have been on the decline since the start of the year as the United States began to ramp up its COVID-19 vaccination efforts. New claims hovered over 800,000 per week in January and are now consistently about half of that number.
ANNUAL INFLATION HOVERS AT 5.4% IN JULY AMID OVERHEATING FEARS
Still, the labor market faces challenges. Many employers have complained that they are struggling to find workers, and data show that there are more job openings than people to fill them. The unemployment rate is also still much higher than before its pre-pandemic level of a mere 3.5%, and there are millions of fewer people employed than in February 2020.
Further complicating the country’s economic situation, inflation has become a prominent side effect of U.S. economic recovery. Inflationary pressures have consistently outpaced expectations from both the Federal Reserve and economic forecasters.
Consumer prices increased 5.4% in the year ending in July, according to a report released on Wednesday by the Department of Labor. The figure was slightly above expectations but was less dramatic than the surging price increases seen over the past few months.
The Federal Reserve has not altered its pandemic-era monetary policies to slow inflation and has kept interest rates near zero. The central bank has said it won’t hike rates until inflation is running at 2% and there is full employment. The Fed has acknowledged that inflation has been hotter than expected but claims that is transitory and that prices will end up sinking back down.
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President Joe Biden, whose administration has brushed off inflation as temporary, has touted his efforts to provide federal funding during the pandemic and has recently been promoting both a bipartisan infrastructure plan and a planned multitrillion-dollar spending package.
While the economy has seen gains in the form of explosive gross domestic product growth, a recent poll found Biden’s economic approval rating at 42%, a decline from April of 4 percentage points. Most respondents also expressed pessimism for the economy and its future.
