US jobless claims slide more than expected to pandemic-era low of 348,000

• US jobless claims dropped to 348,000 last week, setting a new pandemic-era low.
• The print marked a fourth straight decline and beat the economist estimate of 363,000 claims.
• Continuing claims fell to 2.82 million, barely above the 2.8 million-claim estimate.

The number of Americans filing for unemployment insurance dropped to a new pandemic-era low last week as the latest surge in virus cases did little to dent the labor market's rebound.

Weekly jobless claims totaled an unadjusted 348,000 last week, the Labor Department said Thursday. Economists surveyed by Bloomberg expected claims to drop to 363,000. The print marked a fourth straight decline and places claims at their lowest level since March 14, 2020.

The prior week's total was revised to 377,000 from 375,000.

Continuing claims, which track Americans receiving UI payments, dropped to 2.82 million for the week that ended August 7. That just missed the median estimate for 2.8 million claims.

Weekly claims counts have stabilized at elevated levels after falling at a faster pace through the spring. Readings still sit nearly twice as high as the pre-pandemic norm, implying a significant number of Americans are staying on the sidelines as the economy rebounds.

Continuing claims, however, have dropped at a brisker rate. The decline is somewhat powered by several states prematurely canceling the federal boost to UI benefits. Twenty-six states moved to end the supplement early, with many governors arguing it would push more Americans back into the workforce.

The cancellations haven't been straightforward. Workers in Indiana who sued the state for ending benefits early won the boost back in late June. That decision was reversed on Tuesday, yet due to a 30-day delay in taking action, those workers will receive the bolstered benefits through their planned September expiration, Insider's Juliana Kaplan reported.

The claims print stands apart from less-than-stellar economic data from the past week. The University of Michigan's consumer sentiment index plummeted to its lowest level since 2011 in early August, according to a Friday report. Americans' hopes for economic recovery soured across the board, with respondents citing concerns around the surge in virus cases, inflation, and unemployment.

The plunge in confidence coincided with a larger-than-expected slowdown in spending. Retail sales slid 1.1% in July, exceeding the median estimate for a 0.2% drop and marking the second decline in three months. To be sure, spending still sits well above the pre-pandemic trend. But consumer spending counts for roughly 70% of economic activity, and with the Delta wave only beginning in July, future prints could show even steeper declines.