Jobless claims: Another 751,000 Americans filed new unemployment claims last week
U.S. states saw another 751,000 Americans file first-time unemployment benefits last week, as still-elevated coronavirus case counts threaten to weigh on the pace of recovery in the labor market.
The Department of Labor released its weekly report on new jobless claims Thursday morning at 8:30 a.m. ET. Here were the main results from the report, compared to consensus estimates compiled by Bloomberg:
Initial jobless claims, week ended Oct. 31: 751,000 vs. 735,000 expected and a revised 758,000 during the prior week
Continuing claims, week ended Oct. 24: 7.285 million vs. 7.200 million expected and a revised 7.823 million during the prior week
The Labor Department’s latest report reflected the tenth straight week that new jobless claims came in below the psychologically important 1 million mark. And the past several months’ worth of weekly new claims have come down significantly from the nearly 7 million new claims filed at the beginning of April. However, improvements have slowed to a trickle compared to the initial legs lower in new weekly claims that ensued after April’s peak, and the latest initial jobless claims tally came in worse-than-expected.
“Overall, the economy appears to be losing a bit of momentum,” Wells Fargo Securities economists including Jay Bryson said in a recent note. “Jobless claims have improved recently but remain elevated.”
By state, Illinois reported by far the largest increase in unadjusted new claims last week, with these rising by 23,200 to a total of more than 76,000. Other states that reported increases saw relatively smaller jumps: Kansas, Kentucky, Ohio and Pennsylvania each reported increases in new claims of more than 3,000. And Massachusetts saw the biggest improvement in unadjusted new claims last week, with these falling by more than 9,000 to just under 39,000.
Continuing claims, meanwhile, have also mostly trended lower but held multiples above pre-pandemic levels. Continuing claims averaged about 1.7 million per week in 2019, and peaked at nearly 25 million during the worst week for claims in 2020.
The downtrend in continuing unemployment claims, which represent the number of individuals still receiving state unemployment benefits, likely nods in part to a positive trend of individuals returning to work. However, it also shows that many Americans have exhausted their regular state unemployment benefits and rolled onto the federal Pandemic Emergency Unemployment Compensation program, which provides another several weeks’ worth of benefits. As of last week’s report, the number of Americans that rolled onto that program increased by another nearly 278,000.
Other recent labor market reports also pointed to the slowing pace of recovery in the labor market. ADP’s private payrolls print released Wednesday morning showed that private employers added back just 365,000 jobs in October, for a figure well below the 643,000 expected. And the Labor Department’s October jobs report set for release Friday will likely show just 600,000 non-farm payrolls added back for the month, for a step down from the increase of 661,000 in September.
The latest jobless claims report also comes against the backdrop of an election with a still-uncertain outcome, with key battleground states still tabulating results as of Thursday morning. But while the winner of the White House hangs in the balance, Senate race results so far have diminished the likelihood of a Democratic sweep — in turn pulling back hopes of a near-term, significant virus relief package out of Congress that would serve to bolster aid for the millions of still-unemployed Americans.
An increase in the number of coronavirus cases in the U.S. and Europe has also threatened to upend further progress in the labor market’s recovery. Earlier this week, more than 91,000 cases were reported across the country on Tuesday alone, for the second-highest daily total since the start of the coronavirus pandemic.
Individual companies in industries hardest hit by the pandemic have also recently announced that further job cuts would be forthcoming, raising the specter of persistently elevated jobless claims. Last week, oil major Exxon Mobil (XOM) said planned workforce reductions would impact approximately 1,900 workers in the U.S. alone. And Boeing (BA) last week announced plans for deeper job cuts that would bring its workforce down by another 7,000 employees by the end of 2021.
This post is breaking. Check back for updates.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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