Jobless claims decline to 751,000

Weekly data seen as extension of gradual recovery in hiring

Applications for U.S. state unemployment benefits fell more than forecast last week, suggesting the labor market remains on the path of gradual improvement — while still far from its pre-pandemic health.

Initial jobless claims in regular state programs totaled 751,000 in the week ended Oct. 24, down 40,000 from the the week before, Labor Department data showed Thursday. On an unadjusted basis, the figure decreased by a little more than 28,000.

Claims fell in 30 states, including big drops in California, Florida and Texas. Claims rose significantly in Arizona, Illinois, Michigan and Virginia.

The number of people who are continuing to receive unemployment benefits fell more than 700,000 to 7.76 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 13 weeks.

“Today’s slight decline in total initial unemployment claims is a move in the right direction,” Hiring Lab economist AnnElizabeth Konkel said in a statement. “Initial claims continue to fall from their mid-spring peak, though the magnitude remains an issue.”

The figures, the last snapshot of the labor market ahead of Tuesday’s election, underscore a further, yet gradual, recovery in the job market,” Konkel said. “Nonetheless, a renewed surge in coronavirus

infections across the country and a deadlock over new fiscal stimulus threaten to limit further progress.

The decline in continuing claims coincided again with an increase in Americans on Pandemic Emergency Unemployment Compensation, the federal program that provides an additional 13 weeks of benefits. That figure rose by more than 387,000 to 3.68 million in the week ended Oct. 10.

A separate report Thursday showed the economy grew at a record 33.1% annualized pace in the third quarter. But even with the outsize gain, gross domestic product is still below its pre-pandemic peak. Similarly, while weekly unemployment claims have improved significantly from April, they remain at more than three times their pre-crisis level.

Data have been volatile over the past month after California stopped accepting new jobless claims for two weeks and temporarily reported estimated numbers, inflating the national figures. Last week’s report showed revised data for California contributed to the drop in overall claims. The state also reported fewer claims in the most recent week.

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%.

Layoffs have continued at some large companies. Boeing said Wednesday that it will cut 30,000 jobs by the end of next year, almost one-fifth of its workforce, up from an earlier announcement that it would shed 19,000.

Home and auto sales have emerged as bright spots in the economy and have helped strengthen U.S. manufacturing. But the pandemic recession, unlike previous downturns, has done much more harm to in-person services and cost the jobs of millions of workers at restaurants, bars, gyms and theaters.

Those businesses have suffered from government shutdown orders, some of which might now be revived as the virus resurges. Even without shutdowns, the reluctance of many people to travel, shop or dine out for fear of contracting the virus has compounded the difficulties for face-to-face service industries.

In a sign of caution, Americans boosted their savings over the summer, banking a big chunk of the

$1,200 checks that went to most individuals and a nowexpired $600-a-week federal jobless benefit. Both were contained in the $2 trillion stimulus package that Congress approved in the spring.

Some research suggests that by September, unemployed Americans had spent about two-thirds of what they had saved. If so, the jobless will probably cut their spending in the coming months and weaken growth.

Americans are already showing concern about the economy. Consumer confidence slipped in October after rising sharply in September. The outlook for the economy over the next six months fell particularly hard, according to the Conference Board, a business research group.

With roughly 20 million Americans unemployed, the pandemic recession is still causing hardship for many families. One-quarter of all adults say their family’s financial condition worsened in September compared with February, before the pandemic, according to a survey by the Urban Institute. One in seven say they or a spouse or partner has lost a job during the downturn.