Delta Variant Not Slowing U.S. Hiring as Unemployment Claims Drop for Third Week

Recent coronavirus case surges attributed to the Delta variant have not slowed the U.S. hiring rate, as the number of Americans filing unemployment claims fell last week for the third time in a row.

Unemployment claims are seen as a real-time measure of how the job market is faring, and lower claims for a third consecutive week are the latest sign that fewer people are being laid off. As the economy bounces back, employers are attempting to fill jobs left vacant by the pandemic as customer demand increases.

A Labor Department report released Thursday showed that unemployment claims fell to 375,000 last week, down from 387,000 the previous week. The total number of applications has been steadily falling since it reached over 900,000 in early January.

For more reporting from the Associated Press, see below:

Now Hiring Sign
The Department of Labor says unemployment claims fell for the third time in a row last week, even as the number of Delta variant cases of the coronavirus increases. Above, a man wearing a face mask walks past a "Now Hiring" sign in front of a store in Arlington, Virginia, on May 14, 2020. Olivier Douliery/AFP via Getty Images

In many states, the weekly unemployment figures have been inflated by fraud and by multiple filings from unemployed Americans as they navigate bureaucratic hurdles to try to obtain benefits.

Those complications help explain why the pace of applications remains comparatively high. Before the pandemic paralyzed the economy in March 2020, unemployment applications were running at about 220,000 a week.

Many states, for example, require self-employed and gig workers to first seek conventional unemployment benefits—and be turned down—before they can apply through a program that was set up last year to provide jobless aid to them for the first time. That program, and a $300-a-week federal supplemental unemployment benefit, will expire nationwide in the first week of September. About 22 states, mostly led by Republican governors, have already canceled both programs.

A total of about 12 million people are receiving unemployment benefits, down sharply from the previous week's figure of nearly 13 million. That drop reflects that more Americans are being hired and no longer receiving benefits. Another factor is the cancellation in many states of the federal program for the self-employed and a separate program for the long-term jobless.

For now, nearly 8.7 million people continue to receive aid through those programs and will lose their benefits when those programs expire nationwide on September 6.

In July, employers added a substantial 943,000 jobs, the government said last week, and the unemployment rate sank from 5.9 percent to 5.4 percent. Average hourly earnings jumped a sharp 4 percent in July from a year earlier, indicating that employers have felt compelled to raise pay. Still, that report was based on a survey that was conducted in mid-July, before a surge in Delta virus cases took off.

A total of about 12 million people are receiving unemployment benefits, down sharply from the previous week's figure of nearly 13 million. That drop reflects that more Americans are being hired and no longer receiving benefits. Another factor, though, is that about 22 states have ended two federal programs that provide aid to self-employed and gig workers and to the long-term unemployed.

On Monday, the government reported that employers posted more than 10 million available jobs in June, the most on records dating back to December 2000. That meant there were more open jobs than there were unemployed people that month. Yet those figures, too, predate the recent spike in coronavirus cases.

But credit card spending on airline tickets has fallen 20 percent from a mid-July peak, according to economists at JPMorgan Chase, suggesting that in response to the increase in infections, consumers may be starting to slow their travel spending, which had jumped in recent months.

And after returning to pre-pandemic levels for much of June and July, restaurant traffic dropped about 10 percent below that level in the past week, according to restaurant software provider OpenTable.

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A "Now Hiring" sign at a business in Richmond, Virginia, on June 2. Steve Helber/AP Photo