Jobless claims total 340,000, the lowest level since March 2020

Initial filings for unemployment insurance fell last week to their lowest levels since March 2020 in another sign that the labor market is gradually improving from the Covid-19 era, the Labor Department reported Thursday.

First-time jobless claims totaled 340,000 for the week ended August 28, compared with the 345,000 Dow Jones estimate. That is the lowest level for initial claims since March 14, 2020 when first-time claims totaled 256,000, just before the coronavirus pandemic caused a historic rush to unemployment benefits.

The previous week’s level of initial claims was revised up by 1,000 from 353,000 to 354,000.

The level of continuing claims, the measure of ongoing benefits, was 2.75 million, a decrease of 160,000 from the previous week’s revised level. The decrease in the number of continuing claims also represents the lowest level for insured unemployment since the Covid era began.

Economists looking for even more robust job creation have noted that federal unemployment benefits, a safety net for those who lost jobs during the worst of the Covid-19 pandemic, are set to expire on Sept. 6. Others noted that with public schools starting to open across the U.S., parents may be able to finally return to the office.

“Bottom line, we now have the lowest initial filings for claims and smallest level of continuing claims since everything changed in March last year,” wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group. “Just listen to any company that is looking to expand and you’ll hear stories about the difficulty in finding positions so it makes sense that claims continue to decline.”

“We’ll of course now hear about what will happen in coming weeks as classrooms refill, hopefully without incident, parents go back to work and added benefits expire,” he added.

The total number of continued weeks claimed for benefits in all programs across all states for the week ending August 14 was 12.19 million, an increase of 178,526 from the previous week. There were 29.75 million weekly claims filed for benefits in all programs in the comparable week in 2020.

The jobless claims data comes one day ahead of the Labor Department’s all-important monthly jobs report, a detailed update that Wall Street uses as a gauge on the broader U.S. labor market.

That report will show how the U.S. labor market fared in August. Economists expect that U.S. employers added 720,000 payrolls last month and that the unemployment rate ticked lower to 5.2% from 5.4%.