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More than 824,000 Americans filed for unemployment insurance for the first time last week, the Labor Department said Thursday, as the economic rebound that began in the summer slows amid fresh layoffs and regional flareups of the coronavirus.
The newest round of 824,542 claims is significantly lower than the record high 6.2 million who filed first-time claims in early spring when most non-essential businesses closed to slow the spread of the coronavirus.
But the number of filings rose from the week before by 28,527. And in less than seven months, more than 57 million have sought unemployment assistance for the first time. The figures are not seasonally adjusted.
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USA TODAY is now using non-seasonally adjusted jobless claims numbers because the Labor Department has switched to a different method to adjust the data based on seasonal factors, such as school workers losing jobs in June. The old method resulted in adjustments that dramatically inflated the number of claims filed during the global health crisis.
Continuing claims, which represent all Americans still getting unemployment payments with a one-week lag, continued to drop, totaling 12,264,351, a decrease of 1.4% from a week earlier.
Economists have been focusing more on that number because it reflects all who remain unemployed, while its weekly changes give a clearer snapshot of how many people have returned to work.
Still, the weekly tally of initial claims remains stubbornly close to what was previously the all-time high of roughly 1 million on a non-seasonally adjusted basis during a 1982 recession.
“As these data show, the recovery still remains far too slow for millions who were laid off in the spring and summer,” Andrew Stettner, senior fellow at The Century Foundation, said in a statement.
Rebound is underway, but slowing down
The labor market is expected to rebound faster than it did in the wake of the Great Recession, Sophia Koropeckyj, an economist at Moody’s Analytics, said in a note. But the rebound is slowing, economists say, as some businesses shut their doors amid flareups of the coronavirus in different parts of the country.
A series of headwinds, from the failure of Congress to approve additional financial relief for businesses and the unemployed, to lack of a vaccine will likely mean it will be another three years before the jobs picture mirrors what the nation experienced before the pandemic.
“Employment gains will stall completely in the fourth quarter,” Koropeckyj said. “An enduring recovery will not occur until a vaccine is widely available, likely a year from now. Only then will enterprises from restaurants and hotels to public transit to performing arts organizations begin to function normally … The U.S. will not return to its pre-COVID-19 employment level until the end of 2023.”
Mike Loewengart, managing director, investment strategy for E*TRADE Financial Corporation said in a statement that “while jobless claims under a million for 4 straight weeks could be considered a positive, we’re staring down a pretty stagnant labor market. This has been a slow roll to recovery, and with no signs of additional stimulus from Washington, jobless Americans will likely continue to exist in limbo.”
An extra weekly unemployment benefit of $600 ended in July. And many states have struggled to distribute an additional $300 a week in aid authorized by President Donald Trump, while others have already dispensed all the available funds.
“Consumers’ spending, nearly 70% of the economy, can’t continue to increase at its recent pace in the aftermath of the ending of enhanced unemployment benefits,” Ian Shepherdson, chief economist with Pantheon Macroeconomics said in a note. “And the latest upturn in Covid cases and hospitalizations … threatens to trigger renewed restrictions on economic activity.”
“Against this backdrop,” Shepherdson continued, “the need for further fiscal action is obvious, but we no longer expect any meaningful relief bill until February.”
Follow Charisse Jones on Twitter @charissejones
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