U.S. weekly jobless claims fell to 963,000, first time below 1 million since mid-March

First-time claims for unemployment insurance last week fell below 1 million for the first time since March 21 in a sign that the labor market is continuing its recovery from the coronavirus pandemic.

The total claims of 963,000 for the week ended Aug. 8 was well below the estimate of 1.1 million from economists surveyed by Dow Jones. That represented a decline of 228,000 from the previous week’s total.

Jobless claims had totaled above 1 million for 20 consecutive weeks as the U.S. economy went into lockdown to contain Covid-19. The last time the total was below that number was March 14, with 282,000, just as the pandemic declaration first hit.

While the sub-1 million reading marks a milestone, there’s still plenty of work to do for the job market to get back to normal. Those collecting benefits for at least two weeks, known as continuing claims, totaled nearly 15.5 million, a decrease of 604,000 from a week ago but still well above pre-pandemic levels.

Markets cut losses following the report, with Wall Street now indicating a flat open for stocks.

The total Americans receiving unemployment benefits fell sharply for the week ended July 25, down more than 3 million to 28.26 million, also pointing to a downward trend in joblessness. A year ago, that number was 1.7 million.

Those receiving benefits under the Pandemic Unemployment Assistance program totaled 488,622, a decline of 167,377 from a week ago. The program provides compensation to those who normally wouldn’t be eligible for benefits such as independent contractors.

At the state level, the biggest drops in claims came from Florida (-23,180), New York (-21,905) and Texas (-11,233), according to numbers not adjusted for seasonality. The total unadjusted total was 831,856, a decrease of 156,453. Some economists say the unadjusted number is more relevant as the current circumstances surrounding the pandemic are not subject to seasonality.

The  report comes as the U.S. has recovered about half the jobs it lost during the pandemic closures, according to recnt nonfarm payrolls report. July saw a gain of about 1.8 million, bringing the unemployment rate down to 10.1%.

However, that remains well above the pre-pandemic level of 3.5%, which was the lowest in 50 years.