Another 840,000 U.S. workers filed for a week-end unemployment benefit on October 3rd, a moderate drop of 9,000 from the previous week, and a historically high number that suggests a sluggish recovery in the labor market.
Jobless claims report of the Labor Department, published Oct. 8 (pdf), also revised up to 12,000 the number of people who filed initial jobless claims the week before, up to 849,000. The number of filings last week remains well above the Great Recession peak of 665,000 weekly filings in 2007-08, reinforcing the view that the labor market will take time to recover from the recessionary lows caused by the outbreak of the CCP (Chinese Communist Party) virus.
The largest 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), Massachusetts (+1.886).
The biggest drops in weekly unemployment claims were in Texas (-7,075), Florida (-6,655), Georgia (-5,895), New York (-5,112) and Oregon (-2,317).
"The new claims appear to have settled on a still historically high pattern, which has been in the 800,000 range since late August. The medium-term outlook remains quite concerning, "said Mark Hamrick, senior economic analyst at Bankrate, in an e-mailed statement to The Epoch Times. "The increasing number of COVID-19 cases in the U.S. and the dim prospects for further substantial federal relief legislation is dampening the forecasts for broad, near-term economic improvement," he added.
The report also stated that the number of people who continue to receive unemployment benefits decreased from 1 million to 11 million. While the drop indicates that many unemployed people are being recalled to their old jobs, it also reflects the fact that some have taken advantage of their regular state benefits for 26 weeks and have moved to extended benefits programs lasting another three months.
In addition, the total number of people claiming benefits in all programs for the weekend of September 19 fell by 1 million to 25.5 million, compared with 1.4 million in the comparable week of last year.
The gains on the labor market from the re-opening of businesses appear to have faded. Last Friday's September employment report — the last one before the presidential election of Nov. 3—showed the fewest number of jobs created since the labor market began to recover in May. About half of the 22.2 million people who lost their jobs in the early days of the pandemic are still out of work.
Economists predict a further slowdown in hiring through the rest of 2020 and 2021, especially without a further package of federal pandemic assistance. Prospects for another rescue bill seem 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 on Congress to hand over relief to airlines, more money to 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 for Airline Payroll Support and $135 billion for Paycheck Protection for Small Business. Both of these will be paid out in full with unused funds under the Cares Act. Have the money. I'm going to sign now! "The president was tweeting.
Trump also called for a stand-alone bill for direct payments to Americans, writing in a tweet: "If I'm sent a stand-alone bill for stimulus checks ($1,200), they're going to go out to our great people IMMEDIATELY. Right now, I'm ready to sign. Do you listen to Nancy? Meanwhile, Federal Reserve Chairman Jerome Powell said at the event on Tuesday that economic rebound could still slip into a downward spiral if the outbreak of the CCP virus is not effectively controlled and if growth is not sustained.
"The expansion is still far from complete," Powell said in remarks made online to the National Business Economics Association.
He added that if the recovery slows too much, it could lead to a situation where "weakness feeds on weakness" and "recessionary dynamics" are triggered. With cases of the CCP virus rising across a large part of the country and an expected fall, economists fear the re-imposition of restrictions on businesses, particularly in the hard-hit services sector.