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US Initial Claims Slip, but Stay Above 1 Million

The pace of initial claims gains continues to astound, with COVID-19 cases surging in several states that are causing some restrictions to be put back into place.

Initial filings fell further in the July 4 holiday week, but the weekly level of new claims remains well above one million more than three months after the COVID-19 layoffs began.

The Labor Department reported that initial claims filings fell by 99,000 to a 1.314 million level in the July 4 week, below the 1.375 million level expected and following a downward revision to the previous week’s level to 1.413 million.

The total number of unadjusted new claims filed since the start of the COVID-related shutdowns climbed to 46.2 million, with several repeat filers as some businesses laid off employees after rehiring them.

Unadjusted claims fell by 31,644 in the current week, with the state data showing a large decline in Florida and a large increase in Texas, two states that have seen COVID resurgences.

The Labor Department reported that 1,038,905 workers filed under Federal Pandemic Unemployment Assistance on an unadjusted basis, up from 996,842 in the previous week.

The level of continuing claims fell by 698,000 to 18.062 million in the June 27 week after falling by 471,000 in the previous week. The insured unemployment rate fell to 12.4% from 12.9% in the previous week.

Released later Thursday, wholesale inventories fell by 1.2% in May, unchanged from the advance estimate. Inventories were down 0.7% excluding a 5.1% decline in motor vehicle inventories. Combined with the sharp decline in retail inventories and small gain in factory inventories, business inventories are tracking for a 2.3% decline.

Wholesale sales rose by 5.4% and were still up 4.3% excluding a 23.4% rebound in vehicle sales. There were large increases in retail trade sales and factory shipments in the month as well, so business sales are tracking for an 8.3% increase in the month.

A survey released by the National Association of Realtors showed a return of buyers and sellers to the market. More than 90% of agents report that they have seen buyers returning to the market after the COVID shutdowns, with many reporting that buyers never left.

Likewise, sellers have returned, according to 89% of respondents. For both buyers and sellers, there has been increased urgency to buy or sell a home, particularly in more rural and suburban areas.

Not surprisingly, there is increased desire for home offices, larger homes, and more space in general after COVID. Many realtors said they are prepared for a resurgence of COVID, with some acknowledging a need to change the way they conduct business by using more virtual tools.

Kevin Kastner

Julie Ros

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