Initial Claims Drop To New Post-Covid Low Even As Total Benefits Recipients Rise To 4 Week High

After yesterday’s dismal ADP jobs report and contraction in the ISM Mfg Employment Component, traders were looking forward to some good news on the jobs front, and they got it moments ago when the DOL reported that in the week ending August 28, initial jobless claims dropped again, sliding from 354K to 340K, beating expectations of a 345K print and a new post-covid lockdown low…

… while continuing claims also hit a new post-March 2020 low of 2.748MM, down from 2.908MM last week and also better than the 2.808MM expected.

The states with the biggest increases in initial claims were Missouri (+6,837), Ohio (+5,217), and New York (+3,381), while the states with the biggest drops were Illinois (-6,854), California (-3,591), and Virginia (-3,258).

Yet despite the continued improvement in claims, the total number of Americans collecting benefits actually rose by over 178k to just under 12.2 million.

In fact, as shown below, the total number of claimants actually hit the highest level in 4 weeks despite the expiration of jobless benefits across various republican states.

Putting it all together, we now have a record 10+ million job openings and over 12mm people still on the dole. What’s wrong with this picture?