The job market’s recovery from the coronavirus-induced recession is floundering as the health crisis lingers, employers continue to lay off hundreds of thousands of workers and Congress remains deadlocked over another federal rescue package.
About 787,000 Americans filed initial applications for unemployment insurance – a rough gauge of layoffs across the USA – last week, down about 40,000 from the prior week, the Labor Department said Thursday. The figures are not seasonally adjusted.
There’s a caveat. California isn’t processing claims for two weeks to reduce its backlog and install fraud prevention technology, Labor said. The pause “will likely result in significant week to week swings in initial claims for California and the nation unrelated to any changes in economic conditions,” Labor said.
About 58 million people have sought benefits over the past six months. The weekly figures have trended down since peaking at 6.2 million in early spring but remain historically high. Before the crisis, the record for weekly claims on a nonseasonally adjusted basis was about 1 million during a recession in 1982.
Economists expect Labor to announce on Friday that the USA added about 850,000 jobs in September, down from 1.4 million the previous month. Such a figure would mean the nation has recouped slightly more than half the 22.1 million net jobs lost in early spring as states shut down nonessential businesses to curtail the outbreak. The employment report will be the last before an election that could hinge on how voters view President Donald Trump’s handling of the pandemic and its economic fallout.
The claim totals released Thursday will not figure into the September jobs report out Friday but rather the October report, which could reveal a drop in payrolls for the first time since April, according to Ian Shepherdson, Pantheon’s chief economist.