The number of Americans seeking unemployment benefits fell last week to 837,000, which, while down by 36,000 from the previous week, remains well above the Great Recession peak of 665,000 weekly filings.
The Labor Department’s jobless claims report, released Oct. 1 (pdf), also showed that the total number of people claiming unemployment benefits in both state and federal programs rose by nearly 485,000 for the week ending Sept. 12, to 26.5 million. In the comparable week in 2019, there were 1.4 million, illustrating the immense impact of the pandemic and related lockdowns on the U.S. labor market.
“This marks 28 weeks since the COVID-caused downturn ignited an eruption of historic and, as we see once again, sustained job loss, even as some employers bring employees back to work,” said Mark Hamrick, senior economic analyst at Bankrate, in an emailed statement to The Epoch Times.
It was a mixed picture across states, with declines in jobless filings for the week ending Sept. 26 in Florida, New York, Texas, and Georgia, while Arizona, Nevada, New Jersey, and Illinois saw an uptick.
“The pressure remains on elected officials in Washington to move forward on relief legislation to avert more substantial job losses as well as heightened financial pain on the part of unemployed and underemployed Americans,” Hamrick said. “At issue is whether the just-begun fourth quarter brings a measure of economic stability or greater pain.”
Job gains from the reopening of businesses are fading, and economists are predicting a slowdown in hiring through the rest of 2020 and into 2021, unless another fiscal package is passed. House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin met on Sept. 30 in a bid to broker a bipartisan deal on stalled negotiations. While no deal was reached, the sides vowed to continue talks, and Mnuchin told Fox News that the parties agreed on a range of measures, including more funding for small businesses and direct relief to families and individuals.
While third-quarter growth estimates are topping a 32 percent annualized rate, fueled by a reopening economy, as well as unprecedented fiscal and monetary stimulus, economists have cut their growth forecasts for the fourth quarter. Goldman Sachs analysts in a recent research note cited by Business Insider, predicted gross domestic product (GDP) would grow by a 3 percent annualized rate in the fourth quarter, down from their earlier prediction of 6 percent.
A revised GDP estimate, released Sept. 30 by the Commerce Department, confirmed that the U.S. economy contracted by an annualized 31.4 percent in the second quarter, when businesses were shuttered across the country amid stay-at-home orders and other virus containment measures.
Overall jobless aid has shrunk in recent weeks, with the $600-a-week enhanced unemployment benefit expiring at the end of July and the $300 weekly benefit that President Donald Trump offered through an executive order for six weeks also about to run out. This is likely to affect Americans’ incomes and spending, which a separate report on Oct. 1 showed are either declining or slowing.
Consumer spending, which accounts for around two-thirds of the U.S. economy, rose by 1 percent in August, a slower pace than the 1.5 percent it notched up in July, according to the Commerce Department. Personal incomes fell by 2.7 percent in August, after growing 0.5 percent in July, suggesting the spending growth likely was due to Americans dipping into their savings.
“Unless employment growth picks up, or additional [government] aid is extended, consumer spending is at risk of slowing dramatically during the second phase of the recovery,” said Gregory Daco, an economist at Oxford Economics.
On Oct. 2, the government will issue the jobs report for September, the final such report before Election Day, Nov. 3. Analysts have forecast that it will show a gain of 850,000, which would mark the third straight monthly slowdown in job growth. It would mean that the economy has regained just over half the 22 million jobs that were lost to the pandemic.
The unemployment rate is expected to decline to 8.2 percent from 8.4 percent, according to data provider FactSet.
The Associated Press contributed to this report.