Data: Department of Labor; Chart: Andrew Witherspoon/Axios

Thursday's jobless claims report showed U.S. unemployment appears to be turning a corner, but it may not be the one those anxious for an economic recovery are hoping for.

What happening: Unadjusted initial jobless claims for the week ending Aug. 1 fell below 1 million for the first time in 20 weeks, while the number of people receiving traditional unemployment benefits fell below 16 million for the first time in 17 weeks for the week ending July 25. Continued claims are reported with a two week lag.

  • The number of Americans receiving benefits through the Pandemic Unemployment Assistance program dropped to 13 million as of July 18, the lowest since June 13.

Yes, but: The number of people receiving some form of unemployment insurance from the government as of July 18 rose to 32.1 million, up by 1.3 million from the previous week.

  • That's because fewer people are applying for traditional unemployment benefits, and more are moving to extended unemployment programs like the Pandemic Emergency Unemployment Compensation program and the Short-Term Compensation program.
  • While less than 90,000 people had qualified for these extended programs as of the week ending April 11, there were 1.5 million recipients for the week ending July 18.
  • That number nearly matched the total number of people claiming benefits in all unemployment programs during the comparable week in 2019.

Why it maters: "There are 14 million more unemployed workers than job openings," EPI senior economist Heidi Shierholz says.

What to watch: The coronavirus pandemic has caused a "reallocation shock," economists at the Chicago Fed write in a new blog, and that could increase unemployment by up to 4 percentage points and keep it elevated for two to three years.

  • "Because the pandemic has had disproportionate effects on different industries, it may lead to a reshuffling of workers across those industries."
  • "Because inter-industry reallocation is more difficult and time-consuming than within-industry reallocation (due, e.g., to necessary retraining and relocation), the reallocation induced by the pandemic may lead to a higher level of unemployment for a more extended period."

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