It's Jobless Thursday

And initial unemployment claims fell, though the 4-week moving average rose slightly:

Workers’ filings for new unemployment benefits resumed their decline last week and remain near a pandemic low as the labor market continues to recover from the pandemic, economists say.

New jobless claims dropped slightly to 400,000 for the week ended July 24 from a revised 424,000 the week before, the Labor Department reported Thursday. The four-week moving average, which smooths out volatility in the weekly figures, edged higher to 394,500.

The labor market and overall economy are expected to continue recovering from a sharp downturn earlier in the pandemic. But economists cite uncertainty from the Delta variant of Covid-19, continuing supply-chain constraints and a shortage of available workers as risks to the outlook.

About the recent surge, it appears that the GDP numbers for the 2nd quarter disappointed, though they still showed robust growth:

The U.S. economy grew rapidly in the second quarter and exceeded its pre-pandemic size, but the outlook has suddenly turned cloudier due to the fast-spreading Delta coronavirus variant.

Virus cases are rising again, particularly in parts of the country where vaccination rates remain low. The Centers for Disease Control and Prevention this week recommended that vaccinated people resume masking indoors in places with high or substantial transmission of coronavirus, leading some local governments and businesses to reinstate restrictions on activity.

………

Gross domestic product, the broadest measure of U.S. goods and services produced, grew at a 6.5% annual rate in the second quarter, up slightly from a 6.3% growth rate in the first three months of the year, the Commerce Department said Thursday. The reading was below economists’ estimates but pushed the size of the economy above its pre-pandemic level, a milestone that underscores the speed of the recovery that began in May 2020.

The strong spring growth was fueled by trillions of dollars in fiscal stimulus and consumer spending that jumped at an 11.8% annual rate as more people received vaccinations and businesses reopened. U.S. payrolls continued to grow during the quarter, expanding the labor market by an average of nearly 600,000 a month. More recently, initial jobless claims last week resumed their decline.

Economists see two main ways the spread of the Delta variant could derail the robust recovery. First, some state and local governments could reimpose restrictions on businesses. Second, consumers could curtail spending on travel, dining out and moviegoing out of heightened cautiousness.

The natural question here is, "What happens when the stimulus spending is cut, as happens in September?"

We are still well behind where we would have been without the pandemics, even if we have "caught up" to where we were in February of last year.