Unemployment Falls, Student-Debt Borrowers Get Forgiveness
Unemployment Reaches New Pandemic Low
Initial jobless claims reached a pandemic-era low despite rising cases of COVID-19 due to the Delta variant. For the week ending August 14, 348,000 individuals filed first-time unemployment claims, coming in lower than the 365,000 economists were looking for.
Initial unemployment claims last hit that number in March 2020 before the pandemic put millions of people out of work. In the early days of the pandemic, over 22 million people were unemployed, with the rate close to 15%.
In another sign the economic recovery continues despite the Delta variant, continuing unemployment claims declined to 2.82 million. It marks a 79,000 dip from the week prior. It was also the lowest number since the pandemic began.
Still More Jobs Than Workers
While unemployment numbers are narrowing, businesses are still struggling to hire workers. There are about 6 million fewer Americans who are considered employed than before the pandemic struck. In July 8.7 million people were looking for employment, although there were still about 10 million job openings.
As a result of that imbalance, wages for workers have been increasing, with hourly pay up 4% in July compared to last year. Before the pandemic hit, that would have marked a record increase going back to 2007.
White House Forgives $5.8 Billion in Student Debt
Another positive for the economy came late last week when the White House announced it is forgiving the student debt of 323,000 borrowers, amounting to about $5.8 billion. Students who can not maintain employment because of physical or psychological disabilities do not have to pay back their student loans. Previously, students had to apply for this benefit, but under the new rule the Department of Education will be able to automatically identify borrowers through administrative matching data.
The program has also been criticized in the past for requiring students to navigate complex rules such as submitting proof of a disability. The Department of Education also required a three-year period in which the borrower’s income was monitored. From student-loan debt forgiveness to an improving job market, there are a lot of positives happening in the economy despite the rapidly spreading Delta variant. It will be interesting if they will be enough to keep the recovery going.
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