The numbers: The number of Americans who applied for jobless benefits in early October shot up to the highest level in seven weeks, possibly a sign that fresh outbreaks of the coronavirus in many states have hurt employment again.
Initial jobless claims filed through state programs jumped by 53,000 to 898,000 in the week ended Oct. 10 from a revised 845,000 in the prior week, the Labor Department said Thursday. Economists polled by MarketWatch had forecast new claims to fall to 825,000.
An unadjusted 372,891 people also filed new claims under the Pandemic Unemployment Assistance Act, the federal law that temporarily made self-employed workers eligible for benefits for the first time.
That put the number of actual or unadjusted new claims at an estimated at 1.26 million, a touch lower than in the prior week.
There’s a big caveat, however.
The number of new claims in California was frozen at 226,179 for the third week in a row. The state stopped updating its figures three weeks ago after launching an effort to whittle down a large backlog, eradicate duplicate claims and weed out fraud.
The state began accepting new jobless applications last week after a two-week pause, but it still isn’t reporting its totals to the U.S. Labor Department. California typically accounts for almost 20% of all new jobless claims in the country, but it’s run closer to 30% during the coronavirus pandemic.
Stripping out California’s estimate, the number of unadjusted jobless claims in the other states rose by 76,670 — a worrisome sign.
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What happened: New jobless claims rose the most in the states of Indiana, Illinois and Massachusetts, where coronavirus cases have increased again. They declined the most in Michigan.
Continuing jobless claims filed through state programs, meanwhile, fell by 1.17 million to a seasonally adjusted 10 million in the week ended Oct 3. That’s also the lowest level since the onset of the pandemic, but it’s unclear if the decline last week reflected more people going back to work or if their unemployment benefits expired.
Altogether, the number of people reportedly getting benefits through eight state and federal programs declined by 215,270 to an unadjusted 25.29 million as of Sept. 26, the latest data available. Some economists question the accuracy of the estimate given that other government data shows the pool of unemployed is about half that size.
New applications for unemployment benefits have tumbled from a pandemic peak of 6.9 million in late March, but the rate of decline has slowed sharply and perhaps even come to a halt in a potentially troubling sign.
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Big picture: The problems in California have made it harder to determine how many people are returning to work or getting laid off from their jobs.
One thing is clear, though: The labor market is not improving as rapidly as it was during the late spring and early summer — and it might even be deteriorating again.
About half of the more than 22 million jobs lost in the first few months of the pandemic have been recovered, but that still leaves millions out of work.
Many economists say the government has to revive a temporary federal unemployment bonus to help families get through the crisis and keep the economic recovery intact. Yet Washington is unlikely to pass another aid bill until after the election on Nov. 3.
What they are saying? “ The latest figures on new workers claiming unemployment insurance cast a dark cloud over the nation’s slow economic recovery,” said Andrew Chamberlain, chief economist at Glassdoor Economic Research. “The number of new claims last week is more than four times higher than the pace of workers filing for unemployment a year ago — a sign that COVID-19 continues to deal heavy blows to the nation’s labor market.”
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to open lower in Thursday trades.