Jobless claims: Fewer workers than expected sought new benefits as COVID-19 surges

·Editor focused on markets and the economy
·3 min read

The ranks of America’s jobless workers swelled yet again, but at a pace lower than Wall Street expected, with new data showing 751,000 filing for new unemployment benefits in the latest week.

The U.S. Department of Labor released its weekly unemployment insurance claims report at 8:30 a.m. ET Thursday. Here were the main metrics from the report, compared to Bloomberg estimates:

  • Initial jobless claims, week ended Oct. 24: 751,000 vs 770,00 expected, compared to the prior week’s upwardly revised 791,000

  • Continuing jobless claims, week ended Oct. 17: 7.756 million vs 7.775 million expected, compared to the previous week’s upwardly revised 8.465 million

Thursday’s data represented the ninth continuous week that jobless claims have remained below 1 million, a key bulwark that’s characterized the COVID-19 era labor market. And continuing claims have remained below 10 million, an encouraging sign that dovetailed with record third quarter growth figures that handily topped expectations.

All told, over 22.6 million people are claiming benefits from a mix of unemployment insurance programs, according to the Labor Department. That number fell by 415,000 from the prior week — but multiples higher than the 1.4 million people claiming benefits in all programs during the comparable week in 2019.

And new filings are still well above the threshold reached during the great recession of 2009, and a slew of major companies have announced plans to cut headcount as a rocky year reaches its conclusion. The U.S. is grappling with a surge in coronavirus cases that’s badly rattled investors and jeopardized an economic rebound.

In recent weeks, hard-hit airlines like American Airlines (AAL) and United Airlines (UAL) are laying off or furloughing tens of thousands of workers; meanwhile, Boeing (BA) on Wednesday announced that it would cut headcount well into 2021.

And with Election Day just days away, Congress and the White House are not expected to reach a deal on a new stimulus package that would bolster the recovery, and provide money to cash-strapped consumers.

Playing in the background is a worrying spike in confirmed coronavirus diagnoses, which have forced Germany, the U.K. and France into new restrictions on public life. In the U.S. Wall Street has been rocked by a record number of daily cases, which has supplanted optimism about the rapid development of a COVID-19 vaccine.

That carries with it the possibility that states and cities — some of which have already begun rolling back moves to reopen businesses — could once again lock down, putting more people out of work as the recovery becomes more uncertain.

“Higher case levels increase the probability that governments once again start locking down and shutting down parts of the economy,” noted JLL’s chief economist Ryan Severino.

“While we do not expect a return to the draconian measures that were implemented in the spring, we note that several countries in Europe have begun re-initiating some stern measures to slow the resurgent outbreak,” Severino said.

“Yet even more modest measures could produce headwinds for the U.S. economy if some businesses must operate at limited capacity, restraining aggregate supply,” he added.

Javier David is an editor for Yahoo Finance. Follow Javier on Twitter: @TeflonGeek

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