Have we begun approaching normalcy? For the first time since states began shutting down commerce to prevent the spread of COVID-19, the weekly initial jobless claims level has dropped below one million new claims. The exit from benefits status also continued last month, showing some strong indications that momentum continues to build for recovery — even after the end of the paid federal benefits bonus.

Or, as some might argue, because of the end of that benefit:

In the week ending August 8, the advance figure for seasonally adjusted initial claims was 963,000, a decrease of 228,000 from the previous week’s revised level. The previous week’s level was revised up by 5,000 from 1,186,000 to 1,191,000. The 4-week moving average was 1,252,750, a decrease of 86,250 from the previous week’s revised average. The previous week’s average was revised up by 1,250 from 1,337,750 to 1,339,000.

The advance seasonally adjusted insured unemployment rate was 10.6 percent for the week ending August 1, a decrease of 0.4 percentage point from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 1 was 15,486,000, a decrease of 604,000 from the previous week’s revised level. The previous week’s level was revised down by 17,000 from 16,107,000 to 16,090,000. The 4-week moving average was 16,169,500, a decrease of 454,500 from the previous week’s revised average. The previous week’s average was revised down by 4,250 from 16,628,250 to 16,624,000.

Emphasis mine. The paid-benefit status totals has dropped more than five million in two months, and not because those benefits had expired. In fact, normal unemployment benefits measured in that bolded part have continued and will continue for several more weeks. The Department of Labor has charts showing the trends in both measures:

That’s quite a drop, and not what most expected when the money ran out on both the unemployment bonus and PPP. Thanks to the stall on Capitol Hill, about which more later, those aid programs have come to an end, at least until Congress and the White House can agree on terms. That had some predicting a new round of massive layoffs that would overwhelm the momentum in the labor market over the last three months.

Instead, as CNBC notes, the momentum continued, even beating market expectations:

First-time claims for unemployment insurance last week fell below 1 million for the first time since March 21 in a sign that the labor market is continuing its recovery from the coronavirus pandemic.

The total claims of 963,000 for the week ended Aug. 8 was well below the estimate of 1.1 million from economists surveyed by Dow Jones. That represented a decline of 228,000 from the previous week’s total.

Jobless claims had totaled above 1 million for 20 consecutive weeks as the U.S. economy went into lockdown to contain Covid-19. The last time the total was below that number was March 14, with 282,000, just as the pandemic declaration first hit.

While the sub-1 million reading marks a milestone, there’s still plenty of work to do for the job market to get back to normal. Those collecting benefits for at least two weeks, known as continuing claims, totaled nearly 15.5 million, a decrease of 604,000 from a week ago but still well above pre-pandemic levels.

True enough; no one’s arguing that 15.49 million on jobless benefits is an objectively good number, or for that matter, 963,000 new jobless claims. In the context of what has preceded those numbers, however, the new measures are encouraging. It suggests that we are still slowly returning to a more normal churn in the jobs marketplace, and that employers are starting to expand at a fairly robust clip by getting people out of the ranks of the paid-benefits status.

This raises some questions about what to do next in terms of relief. If in fact PPP’s expiration isn’t creating a reversal in momentum, just how necessary is it to reopen those coffers? And if we see people returning to work at about the same pace with or without that federal $600/week bonus, is that necessary — or is it more necessary to keep consumer spending up and incentivize more reopening? We may need a couple more weeks of this data to be sure, but this might prompt more questions about the need for more helicopter money, or at least questions about how much and where targeted.