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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."

Go deeper

Dion Rabouin, author of Markets
Nov 9, 2020 - Economy & Business

The jobs recovery remains far from complete

Data: U.S. Bureau of Labor Statistics; Chart: Axios Visuals

The U.S. economy added more jobs than expected last month — 638,000 — marking the sixth month of consecutive declines in the unemployment rate, but there are still 10 million fewer jobs filled than there were in February.

What they're saying: "The combination of elevated unemployment and part-time employment and low participation all point to significant slack in the labor market," economists at Jefferies write in a note to clients.

Felix Salmon, author of Capital
Nov 9, 2020 - Economy & Business

P.S. Economic polls are bad, too

Illustration: Aïda Amer/Axios

This week America witnessed a forecasting failure of almost unprecedented magnitude. October's unemployment rate came in at 6.9%, after dozens of the best-paid and most experienced economic forecasters in the world had predicted the number would come in at 7.7%.

Why it matters: Those forecasters had literally millions of data points of information to go on, and have had ample experience with unemployment releases, which come out like clockwork on the first Friday of every month. But there will be no great post-mortem about why they got the number so wrong.

Journalism enters dangerous new era

Illustration: Brendan Lynch/Axios

The Capitol attack on Jan. 6 resulted in at least nine physical assaults against journalists and at least five arrests, per the U.S. Press Freedom Tracker's top editor.

Why it matters: President Trump's harsh rhetoric towards the press has empowered leaders abroad and locally in the U.S. to continue to attack press that they don't like.