886,000 filed new state jobless claims last week

Number is increase of nearly 77,000 from previous week.

American employers continue to shed workers at a staggering rate as a resurgent coronavirus and the absence of new federal aid take a toll on economic growth.

The Labor Department reported Thursday that 886,000 Americans filed new claims for unemployment benefits last week, an increase of nearly 77,000 from the previous week. Adjusted for seasonal variations, the total was 898,000.

After dropping in late spring and early summer as pandemic-related lockdowns eased, new claims for state jobless benefits had been steadily totaling about 800,000 a week.

“It’s discouraging,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “We’re still stuck at a level of claims that’s far higher than it was during the worst of what followed the crash of 2008. The labor market appears to be stalled, which underscores the need for new stimulus as quickly as possible.”

New claims for Pandemic Unemployment Assistance, an emergency federal program that covers freelancers, self-employed workers, part-timers and others who don’t qualify for benefits under the regular unemployment system, were tallied at 373,000, down from 474,000. Most of the decline reflected an aberration in Arizona, which has been dealing with fraud issues in the program and reported no new claims.

The data doesn’t include fresh figures for California, which has temporarily stopped accepting new unemployment applications to address a huge processing backlog and weed out fraud. Instead, the report incorporated the last weekly figures available.

The lack of fresh data from California makes it difficult to draw firm conclusions, but the latest numbers “point to a lot of churn in the labor market, and it appears the rate of firings has picked up,” said Michael Gapen, chief U.S. economist at Barclays.

Over the past month, large employers, including United Airlines, Disney and Allstate, announced tens of thousands of layoffs, and more are expected as sectors like leisure and hospitality struggle. In some states, restaurants have salvaged some business by serving diners outside, but many will lose that option as temperatures fall.

Despite the widespread economic pain, Republicans and Democrats in Washington have been unable to agree on a new relief package, a failure that may cause the economy to slow further in the coming months. Federal benefits created in March to supplement state payments to the unemployed are set to expire by the end of the year.