By Justin Lahart 

Are fewer people filing for unemployment because the job market is getting better? Or is it because filing isn't as worthwhile as before?

The Labor Department on Thursday reported that the number of people filing new unemployment-insurance claims in the week ended Saturday fell to a seasonally adjusted 963,000, dropping below the one million mark for the first time in months. That is still extremely elevated -- the highest that jobless claims reached following the 2008 financial crisis was 665,000 -- but it is vastly better than the peak of 6.87 million reached in late March.

Falling claims over the past two weeks reversed a worrisome increase in the middle of July. But the most recent decline comes with a caveat: Because the supplemental $600 a week the federal government was providing to unemployed workers expired at the end of July, the incentive for people who have lost their jobs to file for unemployment has been diminished. How much of an effect that might have had is hard to gauge. But in the past, a constant feature of the claims data has been that some people who are eligible for benefits don't bother filing for them.

Meanwhile, some alternative sources of jobs data are sending a different message. Figures from scheduling-software company Homebase, for example, show that the number of hourly employees working at restaurants, retailers and other small businesses has been flat since early July. That is notable because the Homebase figures have been one of the better predictors of what the Labor Department's monthly job figures will show since the pandemic struck. Data from Kronos, a workforce management software company, shows growth in work shifts following a similar path to the Homebase figures.

Meanwhile, the news on the ground is mixed. On the one hand, there are states and cities that have tightened up safety restrictions again in response to rising Covid-19 cases, and that is taking some workers in places such as bars and restaurants off the job. On the other hand, businesses in other parts of the country have come up with ways of bringing employees back to work despite the virus, such as outdoor eating areas for restaurants.

For now the right message might be to take the weekly jobless claims figures -- and much else -- with a grain of salt.

Write to Justin Lahart at justin.lahart@wsj.com

(END) Dow Jones Newswires

August 13, 2020 12:44 ET (16:44 GMT)

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