The US job market is gradually recovering from the pandemic lockdown shock

First-time claims for unemployment benefits fell below a million again last week, the Labor Department reported Thursday. This happened before — in early August — before claims reversed course and bounced higher.

Another 881,000 Americans filed initial claims for benefits last week on a seasonally adjusted basis. Normally, the fact that so many people filed for unemployment last week would not be a reason to celebrate. But these are not normal times, and this is another sign that the jobs market is gradually recovering.

Continued jobless claims, which count people filing for benefits for at least two weeks in a row, also offered some good news: It stood at a seasonally adjusted 13.3 million, falling by more than 1 million from the prior week.

However, a wonky aspect in the report makes it tricky to track the progress of the jobs recovery: The Labor Department changed its methodology for seasonal adjustments starting with this report. Usually, seasonal adjustments are designed to smooth the data and make it more easily comparable. But during the pandemic’s unprecedented effect on the labor market they have added some noise to the data.

The adjustment changes mean that we can’t compare this week’s seasonally adjusted data to that of last week. To get a good look at how the number of claims has changed over time, we should look at the unadjusted data.

Without the adjustments, claims for unemployment insurance actually rose by about 7,500 to 833,352.

On top of that, 759,482 Americans filed claims under the government’s Pandemic Unemployment Assistance Program (PUA), more than 150,000 more than in the prior week. The program allows people usually not eligible for jobless benefits to apply during the pandemic.

Adding those numbers together, first-time jobless claims amounted to nearly 1.6 million, more than in the prior week.

It’s difficult to make sense of this. The headline numbers seem to be moving in the right direction as the US jobs market is gradually recovering from the pandemic lockdown shock. That said, millions of people continue to rely on state benefits to make ends meet while Congress is squabbling about a next round of stimulus.

The Labor Department will again review its adjustment models at the start of next year.