New, initial claims for unemployment fell below 1 million for the first time since March in last week's report from the Labor Department but, perhaps not unexpectedly, new claims have climbed back above 1 million.
Economists polled by Reuters anticipated the claims would fall further, but they may not have expected Congress would leave Washington for a month without doing anything.
Initial claims for state unemployment benefits rose to a seasonally adjusted 1.106 million for the week ended Aug. 15, from an upwardly revised 971,000 in the prior week, the Labor Department said on Thursday. Economists polled by Reuters had forecast 925,000 applications in the latest week.
The previous week’s level had marked the first time since March that new claims had registered below 1 million. With the latest data, new weekly claims have been above the 1 million mark for 21 of the last 22 weeks.
The Congressional Budget Office (CBO) estimates that the $600 per week pandemic unemployment program was supporting between 3 to 5 million jobs by itself through increased consumer spending. That program expired on August 1st and congressional Republicans have refused all attempts to renew it. The Senate GOP's latest stimulus proposal doesn't even include reduced benefits and it also doesn't include stimulus checks.
With up to 30 million unemployed Americans no longer receiving enhanced benefits, up to $18 billion in consumer spending has disappeared from the economy every single week.
You could be conservative or generous and say the number may not be that high because some people have returned to work or continued spending through debt, but even losing $10 billion per week in consumer spending is a self-inflicted wound.
Personally, if another round of stimulus checks went out, I would immediately spend it on food and clothing and those purchases would support someone's job. That's the way our economy actually works, but congressional Republicans have long lost sight of the real economy and only listen to the donor class made up of wealthy shareholders and landlords. The way they see it, Wall Street is doing fine so there's no need for more deficit spending that could justify higher taxes on shareholders next year.
Although I'm skeptical of the program's overall merit, the Paycheck Protection Program has also expired and that will likely contribute to any new jobless claims. Virtually everything Congress did to support the economy has expired and that was a deliberate choice made by the Trump White House and congressional Republicans.