US: Labor market data continue to improve – Wells Fargo

Data released on Thursday showed another decrease in initial jobless claims. Analysts at Wells Fargo point out declines were even seen in states facing sharp rises in COVID-19 cases. 

Key Quotes: 

“Weekly first-time unemployment claims fell for the 14th consecutive week. Claims fell slightly more than the consensus estimate, but remain historically high at 1.314 million. For perspective, jobless claims had been consistently running at just over 200,000 per week at the start of the year.”

“The economy was in another epoch, however, and reflected the strongest labor market in half a century. The lows in jobless claims are not a useful benchmark as to whether the labor markets has returned to normal. A normal level of claims in an economy this size is likely somewhere between 300,000 and 350,000— or about one million below the current level. In short, we still have quite a bit a way to go to get back to “normal.” While full employment is a long way off, the labor market is clearly improving.”

“The resurgence in COVID-19 cases throughout the Sunbelt has, so far, not resulted in higher state unemployment claims. Oklahoma (-40,208), Florida (-11,313), Maryland (-9,926), Georgia (-8,240) and California (-7,132) posted the largest weekly decline in jobless claims, on a non-seasonally adjusted basis. The advance claims for July 4 show continued drops in Florida, Georgia and California. Texas has seen claims turn higher, however, with officials citing layoffs in health care, transportation and leisure & hospitality.”