US Secretary of Labor Marty Walsh. Source: Reuters
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  • American market indexes hit fresh records as the number of Americans filing for unemployment benefits dipped last week
  • Data from the Labor Department shows weekly jobless claims fell by 14,000 to 385,000 over the past week, seasonally adjusted
  • This suggests economic activity in the States is, so far at least, not being disrupted by rising COVID-19 infections in the country
  • While unemployment benefit claims remain above the pre-pandemic level of around 250,000, they have fallen significantly from their peak in April 2020
  • The update comes ahead of the official employment report for the month of July, slated for release on Friday night, Australian time

American market indexes hit fresh records overnight as the number of Americans filing for unemployment benefits dipped last week.

According to the latest data from the US Labor Department, weekly jobless claims fell by 14,000 to 385,000 over the past week, seasonally adjusted. At the same time, layoffs dropped to their lowest level in 21 years — suggesting more Americans are both finding jobs and holding on to existing ones.

The Labor Department said the fall in unemployment claims came after the reported figure from the previous week was revised from 400,000 to 399,000.

What’s more, actual unemployment claims — which are not seasonally adjusted — decreased over the past week by 20,602 to 323,763. Economists polled by Reuters say unadjusted data offers a better read of the labour market, according to the news agency.

Encouragingly, the latest jobs data suggests that economic activity is, so far, not being disrupted by rising COVID-19 infections across the US and in many parts of the world.

US share markets reacted well to the news, which followed a run of strong corporate earnings reports. Last night, the S&P 500 closed at a record-high 4429.1 points. The tech-heavy NASDAQ hit its own record of 14,895.12, while the Dow Jones closed green at 35,064.25 — just shy own its own all-time high.

The Delta variant of the coronavirus, which now accounts for over 80 per cent of all infections across the US, has been spreading rapidly in places such as Florida which has been recording over 10,000 infections per day since the last week of July.

Infection rates in the state have not been this high since January this year.

While unemployment benefit claims remain above their pre-pandemic level of around 250,000, they have dropped substantially from over six million in early April last year, soon after COVID-19 first struck.

Today’s weekly update from the Labor Department comes ahead of the closely watched non-farm payroll reading for the month of July, slated for release on Friday night, Australian time.

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