Some 898,000 Americans applied for unemployment benefits last week as the coronavirus pandemic kept the labor market in a chokehold, the feds said Thursday.
The surprise surge brought the seasonally adjusted number of initial jobless claims filed during the COVID-19 crisis to roughly 64.5 million — a total larger than the combined populations of California and Florida.
Last week’s filings reported by the US Department of Labor jumped from the prior week’s revised total of 845,000 claims, outpaced economists’ expectations for 825,000 and remained well above the pre-pandemic record of 695,000. New claims have hovered between 800,000 and 900,000 for seven consecutive weeks, a sign that the labor market’s recovery from the virus crisis is stalling
“America is unlikely to see a full recovery and a return to low unemployment until the pace of weekly [unemployment insurance] claims dials back significantly,” Glassdoor Chief Economist Andrew Chamberlain said. “As the virus remains in the driver’s seat, today’s elevated claims cast a shadow over the fate of the US labor market in the next half year.”
The latest data, however, may have been distorted as California paused its reporting to work through a backlog of claims and implement fraud prevention technology. The feds used a placeholder figure of 226,179 claims for the Golden State, which accounted for about a quarter of the raw total tallied for last week.
Continuing claims, which measure ongoing joblessness on a one-week lag, fell once again to about 10 million in the week ending Oct. 3. The steady decline in those numbers is likely due to jobless workers exhausting the 26 weeks of benefits that most states provide, according to experts.
But the number of gig workers and others seeking special federal Pandemic Unemployment Assistance dropped by about 91,000 to 372,891 last week. And the total number of workers claiming some kind of state or federal aid ticked down by some 215,000 to roughly 25.3 million in the week ending Sept. 26, the most recent for which that figure is available.
“It looks like the labor markets are improving at the start of October and that some jobless workers who lost their employment in the pandemic recession are getting paychecks once again,” said Chris Rupkey, chief financial economist at MUFG Union Bank.
Despite those silver linings, experts say Washington needs to pass another round of stimulus spending to make sure the economic recovery from the pandemic doesn’t falter any further. Job growth has slowed the last two months, and big companies such as Disney and United Airlines have announced layoffs or furloughs in recent weeks.
“There is risk of stagnation in the coming months as layoffs mount, and more businesses struggle or fail,” said Mark Hamrick, senior economic analyst at Bankrate.com.
