Unemployment Claims Jump, Raising Concerns About Stalling Recovery

Unemployment Claims Jump, Raising Concerns About Stalling Recovery

As talks on a coronavirus relief package drag on, the job market is signaling that the economic recovery may be stalling as Covid cases surge in states across the country.

About 898,000 people filed for state unemployment benefits in the week ending October 10, the Labor Department announced Thursday, an increase of more than 50,000 from the week before. On an unadjusted basis, the weekly number was the highest since July.

Another 373,000 Americans applied for benefits through the Pandemic Unemployment Assistance program, the federal program that covers gig workers and the self-employed, a drop of roughly 90,000 on a week-over-week basis.

All told, nearly 1.3 million people made first-time claims for unemployment benefits, roughly the same as the week before. About 25 million people are currently receiving some kind of jobless aid (although experts say that number is almost certainly inflated to some degree by problems with the data, including double-counting and fraud).

Cause for concern: “No question this report casts doubt on the recovery,” Andrew Chamberlain, chief economist at Glassdoor, told The Washington Post. “This is a sign covid is still dealing heavy blows to the labor market. We’re nowhere near having the virus under control.”

More Covid shutdowns: “Confirmed coronavirus cases have been rising again nationwide in the past month, likely causing more Americans to hold back from eating out, shopping and engaging in other commerce,” the Associated Press’s Christopher Rugaber reported.

Evidence of a stall: “I think we’ve seen the labor market recovery stall out,” Sarah House, senior economist at Wells Fargo, told Bloomberg, adding that she thinks “we’ve seen a heightened risk of the labor market really backsliding.”