First-time jobless claims declined to 348,000 for the week ending Aug. 14 from a previous upwardly revised 377,000. That decline should be put in the context of what we know lies ahead: seasonal distortions around the upcoming U.S. Labor Day holiday, expected volatility driven by the COVID-19 delta variant and declines in the total number of individuals on unemployment insurance as aid is terminated by the states next month.
Thus, forward-looking investors and policymakers should tread carefully in over-interpreting this data during the next six to eight weeks. In our estimation, we will not have an accurate assessment of the true underlying trend in the data until early fall.
That said, the top line stands below the 13-week moving average of 389,100 claims, while continuing claims stand at 2.82 million. Through July 31, there were 11.74 million individuals on some form of unemployment insurance, with 2.8 million on regular state unemployment, 4.8 million on pandemic unemployment assistance, and 3.7 million on pandemic emergency unemployment compensation.