Another 870,000 Americans first filed for unemployment benefits last week, up unexpectedly slightly from the previous week to confirm a slowdown in the US economic recovery.
The U.S. Department of Labor (DOL) released its weekly unemployment claims report at 8:30 a.m. ET on Thursday. Here were the key metrics from the report versus Bloomberg estimates:
First unemployment claims, week ending September 19: 870,000 compared to 840,000 expected and 866,000 in the previous week
Continued Claims, Week Ending September 12: 12.580 million compared to 12.275 million expected and 12.747 million in the previous week
At 870,000, the number on Thursday was the fourth straight week that new jobless claims fell below the psychologically important level of 1 million but were still high on a historical basis. Even so, the labor market has made progress in recovering from the pandemic peak of nearly 7 million weekly reclaims in late March.
“While unemployment claims below a million could be viewed as positive for four consecutive weeks, we are staring at a fairly stagnant job market,” said Mike Loewengart, chief executive of investment strategy at E-Trade Financial Corporation, in an email on Thursday. “This was a slow step in recovery, and with no sign of additional incentive from Washington, unemployed Americans are likely to remain in limbo. Additionally, a shaky job market makes a shy consumer and with a pandemic that looks like it won’t go away without a vaccine, the outlook for the economy is undoubtedly in question. “
Unadjusted, the first jobless claims rose by around 28,500 to around 824,500 compared to the previous week. The seasonally adjusted level of new entitlements increased by 4,000 week to week.
By state, unadjusted claims were again the highest in the state in California – where pandemic unemployment has been linked to forest fire job stress – at more than 230,000, up about 4,400 from the week. Georgia, New York, New Jersey, and Massachusetts also reported significant increases in new claims compared to the rest of the country. Most states reported at least an increase in new claims last week.
The story goes on
Persistent claims also fell from a high of nearly 25 million in May, and fell for a second straight week in this week’s report. However, those figures, which capture the total number of people still receiving unemployment insurance, have not exceeded the 12 million mark since the pandemic hit the job market in mid-March.
Hundreds of people stand outside a Kentucky Career Center hoping to find help with their jobless claims in Frankfort, Kentucky, United States, on June 18, 2020. REUTERS / Bryan Woolston
A consistently high number of people have applied for and received unemployment benefits from regular government programs and those newly created during the pandemic. The number of people receiving benefits in all programs for the week ending September 5 – the last reported week – rose to 26.04 for the first time in three consecutive weeks, increasing from nearly 29.8 million the previous week Millions back.
Of this, more than 11.5 million were in people receiving pandemic unemployment benefits, which is aimed at self-employed and gig workers who are not eligible for regular unemployment benefits but are still affected by the pandemic.
One of the biggest downside risks to further improvement in the labor market has been concerns that Congress may not soon pass another round of fiscal incentives to keep individuals on payroll during the pandemic. Economists have previously said that the end of the last round of federal unemployment benefits increased in late July weighed on the improvement in unemployment.
“The current picture suggests that growth has slowed sharply in the past three months and that the labor market is faltering again amid rising infections and the sudden end of federal government support for the unemployed,” said Ian Shepherdson, chief economist of the Pantheon Macroeconomics said in a note Wednesday.
The need for more fiscal stimulus to support the continued recovery of the economy has become a key issue for policy makers, including Federal Reserve Chairman Jerome Powell and his central bank colleagues. In a congressional statement Tuesday and Wednesday, the Fed chairman said that further fiscal stimulus was “unmatched” by any other form of support that could be unleashed, as the central bank’s credit facilities were largely unaffected by Main Street.
Another 870,000 Americans filed seasonally adjusted new jobless claims last week. (David Foster / Yahoo Finance)
See also: Congressional debates relying on Fed or PPP to get help for small business
“The concept of [congressionally authorized] The paycheck protection program was helpful because, for many of these types of businesses – companies with no cash reserves – the ability to get forgivable credit if they stay open, if they employ staff, has been solid and given them the opportunity to stay in business Business, ”Joseph Minarik, chief economist for the Conference Board and former chief economist for the Office of Management and Budget, told Yahoo Finance. “The idea that you have companies that have been weak for the past few months and now just had to close their doors is a real problem and there is no need to be solved with a loan.”
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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