Jobless Claims Drop, but Remain Historically High

Jobless Claims Drop, but Remain Historically High

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About 787,000 people filed initial jobless claims in state unemployment programs last week, the Labor Department announced Thursday, a drop of 55,000 from the week before and well below analysts’ expectations.

Another 345,000 people filed for benefits through the Pandemic Unemployment Assistance program, the federal program that covers gig workers and the self-employed, an increase of roughly 8,000 on a week-over-week basis.

All told, about 1.1 million people made first-time claims for unemployment benefits, a drop of about 200,000 from the week before. The total number of people receiving any kind of unemployment assistance also fell, down to 23.1 million in early October, a drop of about 1 million.

A mixed picture: The good news is that a downward trend in new jobless claims, which are used as a proxy for layoffs, appears to be solidifying, with the three of the last four weekly reports showing a decline. The bad news is that new claims still registered over 1 million – a staggeringly high level not seen in the post-war era until the coronavirus crisis took hold.

“The overall picture remains unchanged -- the downtrend has been stalling even though the latest decline is somewhat encouraging,” said Bloomberg economist Eliza Winger.

A long way from normal: “There are still millions and millions on the nation’s unemployment rolls because many of the jobs lost during the steepest downturn in economic history have not yet returned,” Chris Rupkey, chief economist at MUFG in New York, told Reuters. “Time will tell if the still-record number of people out of work will act as a brake on the economic recovery or whether the economy’s fortunes depend more on the course of the virus.”

Running on empty? “We’re not calling people back fast enough at a time that we know many households are running on fumes, unable to pay for food for the week and rent,” said Diane Swonk, chief economist at Grant Thornton. “It bolsters the case for stimulus and aid, now," she added. "I feel like a broken record.”