U.S. states saw another 898,000 Americans file first-time unemployment insurance claims last week, representing an unexpected rise in new claims with the pandemic still underway and another round of fiscal stimulus still out of reach.
The U.S. Department of Labor (DOL) released its weekly jobless 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. 10: 898,000 vs. 825,000 expected
Continuing jobless claims, week ended Oct. 3: 10.018 million vs. 10.550 million expected
At 825,000, the expected number of new jobless claims would have represented the seventh straight week that initial claims came in below the 1 million marks. However, new claims have held stubbornly above 800,000 for as many weeks, with a steady stream of new layoffs continuing to weigh on the economic recovery.
Continuing claims, however, have trended lower at a quicker clip recently, and dipped below 11 million for the first time since late March last week. These claims, which are reported on a one-week lag and capture the total number of individuals still receiving unemployment benefits, were expected to have fallen by another 426,000 last week.
The past couple of weeks’ worth of jobless claims data were also flattered by an absence of updated new claims out of California. The state — which has consistently been one of the biggest contributors to new weekly claims — said earlier this month that it was taking a temporary pause in processing initial claims to “reduce its claims processing backlog and implement fraud prevention technology,” according to a Labor Department’s statement.
At the national level, new jobless claims remain higher than their peak during the Great Recession, albeit well off their pandemic-era apex of nearly 7 million. And newly announced job cuts continue to roll in: Companies including AT&T’s Warner Media were reportedly planning thousands of job cuts, according to a Wall Street Journal report last week, and theater-operator Cineworld recently announced it was temporarily closing all its U.S. locations, in a move that would affect some 40,000 workers.
In Washington, a deal on further fiscal stimulus to help keep workers on payrolls and support unemployed Americans with augmented benefits remains elusive. On Tuesday, Senate Majority Leader Mitch McConnell said he planned to have the Senate take up relief legislation after the chamber’s return next week, with his narrower proposal set to include funds chiefly targeted to the Paycheck Protection Program. The deal is virtually certain to be rejected by the House, however, with House Speaker Nancy Pelosi has previously rejected slimmed-down stimulus proposals and deemed them inadequate.
U.S. weekly jobless claims rise to 898,000, exceeding consensus estimate of 825,000, unemployment rate falls to 6.8% pic.twitter.com/Qi3PGFQ9z3
— Reuters (@Reuters) October 15, 2020