Another 840,000 American workers filed for state unemployment benefits for the week ended Oct. 3, a moderate drop of 9,000 from the week before and a historically elevated number that suggests a grinding labor market recovery.
The Labor Department’s jobless claims report, released Oct. 8 (pdf), also revised up by 12,000 the number of people who filed initial jobless claims the week prior, to 849,000. The number of last week’s filings remains well above the 2007-08 Great Recession peak of 665,000 weekly filings, reinforcing the view that the labor market will take time to rebound from the recessionary lows sparked by the outbreak of the CCP (Chinese Communist Party) virus.
The biggest jumps in the number of people filing weekly jobless claims were in Maryland (+3,619), Illinois (+3,414), New Jersey (+2,504), Michigan (+2,358), and Massachusetts (+1,886).
The largest drops in weekly unemployment claims were in Texas (-7,075), Florida (-6,655), Georgia (-5,895), New York (-5,112), and Oregon (-2,317).
“New claims appear to have settled into a still historically high pattern, numbering in the 800,000 range since late August. The intermediate-term outlook remains quite concerning,” said Mark Hamrick, senior economic analyst at Bankrate, in an emailed statement to The Epoch Times. “Putting a damper on forecasts for broad, near-term economic improvement are the rising numbers of COVID-19 cases in the U.S. and the dim prospects for further substantial federal relief legislation,” he added.
The report also said that the number of people who are continuing to receive unemployment benefits dropped 1 million to 11 million. While the drop suggests that many of the unemployed are being recalled to their old jobs, it also reflects the fact that some have used up the 26 weeks of their regular state benefits and have transitioned to extended benefit programs that last another three months.
Also, the total number of people claiming benefits in all programs for the week ending Sept. 19 fell by 1 million to 25.5 million, while in the comparable week last year, that number stood at 1.4 million.
Labor market gains from the reopening of businesses appear to be fading. Last Friday’s employment report for September—the last one before the Nov. 3 presidential election—showed the fewest number of jobs created since the labor market began recovering in May. Around half of the 22.2 million people who lost their jobs in the early days of the pandemic remain out of work.
Economists are predicting a further slowdown in hiring through the rest of 2020 and into 2021, especially without another federal pandemic assistance package. Prospects for another rescue bill look increasingly bleak after President Donald Trump called off talks with congressional Democrats this week after House Speaker Nancy Pelosi (D-Calif.) rejected the White House offer of a $1.6 trillion deal.
Trump, who accused Pelosi of “not negotiating in good faith,” called for Congress to pass relief for airlines, more money for small businesses under the Paycheck Protection Program, and another round of $1,200 stimulus checks to American families.
“The House & Senate should IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support, & 135 Billion Dollars for Paycheck Protection Program for Small Business. Both of these will be fully paid for with unused funds from the Cares Act. Have this money. I will sign now!” the president wrote on Twitter.
Trump also called for a standalone bill for direct payments to Americans, writing in a tweet: “If I am sent a Stand Alone Bill for Stimulus Checks ($1,200), they will go out to our great people IMMEDIATELY. I am ready to sign right now. Are you listening Nancy?”
Meanwhile, Federal Reserve Chairman Jerome Powell said at an event on Tuesday that the economic rebound could still slip into a downward spiral if the CCP virus outbreak is not effectively controlled and if growth is not sustained.
“The expansion is still far from complete,” Powell said in remarks delivered online to the National Association for Business Economics. He added that if the recovery slows too much it could lead to a situation where “weakness feeds on weakness” and triggers “recessionary dynamics.”
With cases of the CCP virus rising across much of the country and a surge expected in the fall, economists fear reimposition of restrictions on businesses, especially in the hard-hit services sector.