The US economy saw yet another historically high number of first-time unemployment insurance claims filed last week, as the coronavirus pandemic continues to strain the labor market.
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 Sept. 26: 837,000 vs. 850,000 expected and 873,000 during the prior week
Continuing claims, week ended Sept. 19: 11.767 million vs. 12.2 million expected and 12.58 million during the prior week
Another 837,000 individuals filed new jobless claims last week, for a marginal step down from the upwardly revised 873,000 reported for the prior period. This marked the fifth straight week that new jobless claims come in below 1 million. On a seasonally unadjusted basis, claims also declined, falling by more than 40,000 to 786,942.
But six months since the pandemic took hold in the US and decimated economic activity, new jobless claims are still running far above levels from before the outbreak. As recently as in February this year, new jobless claims were coming in at a rate of around 200,000 per week.
Continuing jobless claims, reported on a one-week lag and reflecting the number of individuals still receiving unemployment benefits, have also come down from their pandemic-era highs but stagnated at high levels. Continuing claims declined to 11.767 million in the latest print, to mark a pandemic-era low, but a level that still tops the pre-pandemic record high of 6.6 million continuing claims filed in one week during June 2009.
“Initial claims, which seem to be stabilizing at an elevated level, suggest the labor market recovery is plateauing,” Nomura economist Lewis Alexander said in a note Sep. 25. “That said, recent declines in continuing claims suggest that rehiring activity continued to offset declines.”
Still, a wave of new layoffs from major corporations looms. On Tuesday, Disney (DIS) said it would be cutting 28,000 jobs in its resort business, in one of the deepest reductions announced so far during the pandemic period. Shell (RDS-A) on Wednesday said it planned to slash up to 9,000 positions by the end of 2022. And airlines including American Airlines (AAL) and United Airlines Holdings (UAL) have each warned they could furlough some 19,000 and 12,000 workers, respectively, following the October lapse of provisions under Congress’s CARES Act that gave the industry billions to help keep workers on payrolls.
The latest weekly jobless claims print comes a day before the Labor Department’s monthly September jobs report, which consensus economists believe will show the first monthly increase in payrolls of less than 1 million since April. ADP’s private payroll report out Wednesday – an imprecise but typically at least directionally accurate indicator of the payroll changes reflected in the Labor Department’s reports – showed private employers added back a better than expected 759,000 jobs during the month.
The Labor Department’s survey week for the non-farm payrolls report takes place around the 12th of each month. During that week, continuing jobless claims ticked down slightly to 12.58 million from 12.75 million. Initial claims also fell slightly to 866,000 during that week, from 893,000 the prior week.
Initial jobless claims came in slightly better than expected. 837K vs 850K. Modest improvement from last month, but still extremely high https://t.co/9Hjv5P5o3s pic.twitter.com/eaJlf5XxYo
— Joe Weisenthal (@TheStalwart) October 1, 2020
Initial #unemployment claims -36k to 837k (SA) in w-e Sep26 & -40k to 787k (NSA)
— Gregory Daco (@GregDaco) October 1, 2020
> PUA claims (NSA): 650k (+36k)
> Total UI+PUA: very high 1.4mn (NSA) new claimants!
> Climb is long & plateaus are unavoidable but this one is worrisome, especially w/ many biz announcing layoffs pic.twitter.com/pLTAaQw64A