340,000 Americans filed for unemployment benefits last week, fewer than expected. Consensus was looking for 345,000.
The 14,000 decline from an upwardly-revised 354,000 in the prior week took initial claims to a new pandemic-era low (figure below).
The range of estimates, from more than three-dozen economists, was 335,000 to 358,000. The data is becoming more predictable. Forecasting is still a drunken game of darts, but participants are back to drinking Sam Adams (hopefully Octoberfest) instead of Everclear.
The four-week moving average fell to another “since March 14, 2020” low, at 355,000. Initial claims are now less than half of the pre-pandemic record set in the early 80s.
Continuing claims for the week ended August 21 were 2.748 million. That too was below estimates (2.81 million).
The drop in initial claims marked the fifth weekly decline in six (figure below).
Pandemic Unemployment Assistance claims fell last week, while ongoing PUA and PEUC claims were 5,413,238 and 3,800,000, respectively, in the week to August 14. All told, then, 12 million Americans are still receiving some type of benefits.
This is the same story over and over again, but things are poised to get more “interesting” (and I’m not sure that’s the right word) in the months ahead as the pandemic programs roll off.
Don’t expect the debate(s) around benefits’ role in creating and perpetuating labor market frictions to be settled by year-end, though. Opponents of federal generosity imagine a world where people who are being “paid to stay home” will suddenly rush back to man the fry station at McDonald’s once the government stops subsidizing their alleged “laziness.”
One person who doesn’t agree with that is McDonald’s CEO Chris Kempczinski. In a recent interview with David Rubenstein, Kempczinski said it’s been demonstrably more difficult to get workers back into restaurants in the US than abroad. “Certainly the stimulus support had some [effect], but if I asked the franchisees ‘Ok, so in September, is everything going to be good once the stimulus rolls off?’ they’d say ‘No.'”
