Initial claims for unemployment benefits fell to 1 million last week from 1.1 million in the prior period, the Labor Department said in a Thursday report.
“The up and down moves of recent weeks underscore that the recovery will be slow-going as long as the virus continues to circulate,” Wells Fargo economists said in a report. Even with the decline, the level was “still higher than any week during the Great Recession.”
Continuing claims, the tally of Americans receiving unemployment benefits, dropped to 14.5 million in the week ended Aug. 15, the lowest since early April, the report said.
“While the total level remains elevated, continuing claims data is also consistent with continued modest improvement in the labor market,” said Doug Duncan, chief economist of Fannie Mae.
The U.S. economy plunged a record 32% in the second quarter from a year earlier, the Commerce Department said on Thursday in its second GDP estimate for the quarter. That was a slight improvement from the 33% drop it estimated for the period on July 30.
Next week, the Labor Department will report the unemployment rate for the month of August. Economists surveyed by Trading Economics said they expect the rate to fall to 10% from 10.2%.
That 10% would match the worst month of the Great Recession: October of 2009.
For the year, unemployment probably will average 8.8%, Fannie Mae said in a forecast earlier this month.
“We forecast the unemployment rate will remain elevated through the end of the year but will fall below 9.0 percent by December,” the forecast said.
In 2021, the rate probably will fall to 7.1%, Fannie Mae said.