The number of Americans filing new claims for unemployment dropped below 800,000 last week for the first time since March, a surprising move signaling a slowdown in job losses despite surging coronavirus cases.
For the week ending October 17, there were 787,000 new claims for unemployment, a decrease of 55,000 from the prior week, according to data released on Thursday by the Bureau of Labor Statistics.
Claims have been stuck above their prior 665,000 peak during the 2007-09 Great Recession, though they have declined from a record 6.867 million in March.
A more than $3 trillion rescue package early this year provided a lifeline for many businesses, allowing them to keep workers on payrolls. It also lifted economic activity from the downturn, which started in February.
For the week ending October 17, there were 787,000 new claims for unemployment
A sign that reads ‘hiring today,’ is shown at a grocery store in Olympia, Wash., advertising a job opportunity for a meat cutter on Oct. 3, 2020
With funding depleted, businesses, especially in the transportation industry, are either laying off or furloughing workers as demand remains subdued.
A report from the Federal Reserve on Wednesday showed employment increasing in almost all of its 12 districts in early October, though the U.S. central bank noted that ‘growth remained slow.’
The Fed said ’employment gains were reported most consistently for manufacturing firms, although firms continued to report new furloughs and layoffs.’ It described the economy as growing at a ‘slight to modest’ pace.
The number of people who are continuing to receive unemployment benefits tumbled by 1 million to 8.4 million.
The decline shows that some of the unemployed are being recalled to their old jobs or are finding new ones. But it also indicates that many jobless Americans have used up their state unemployment aid – which typically expires after six months – and have transitioned to a federal extended benefits program that lasts an additional three months.
Many jobless recipients are now receiving only regular state unemployment payments because a federal weekly supplement of $300 has ended in nearly all states. And a $600-a-week federal benefit expired over the summer.
In the last monthly employment report before the November 3 presidential election, the Labor Department said that unemployment rates for September fell to 7.9 percent, down from 8.4 percent in August. Since April, the jobless rate has tumbled from a peak of 14.7 percent
The still-elevated number of jobless claims underscores that a full recovery from the pandemic recession remains far off. Job growth has slowed for three straight months, leaving the economy still 10.7 million jobs short of its pre-pandemic level. The unemployment rate remains high at 7.9 percent.
With daily confirmed infections topping 60,000 in recent days, the highest level since July, many consumers have been unable or reluctant to shop, travel, dine out or congregate in crowds – a trend that has led some employers to keep cutting jobs.
Several states, such as Ohio and Idaho, are reporting a record number of hospitalizations from the virus.
Major companies continue to announce layoffs. Aramark, a food services contractor that provides concessions at sports stadiums, said Wednesday that it would lay off 975 workers in Denver, most of whom worked at Coors Field, home of the Colorado Rockies.
A member of the Aramark Clean Team works during a game between the Boston Red Sox and the Baltimore Orioles on September 23 at Fenway Park in Boston. Aramark said Wednesday that it would lay off 975 workers in Denver and 550 in Kansas City
The company is also cutting 550 jobs in Kansas City. Most major league baseball games this season were played with limited or no crowds, thereby reducing the need for concession workers
Amtrak said at a congressional hearing Wednesday that it would have to cut 2,400 jobs unless Congress approves emergency aid as part of another stimulus bill.
Yet negotiations in Congress over another round of financial aid have largely stalled, with little prospect for a deal before Election Day.
Democratic House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin are continuing to negotiate. But Republican Senate Majority Leader Mitch McConnell has warned the White House against agreeing to a large package that would be opposed by most Senate Republicans.