The Denver Post

Jobless claims drop to 787,000, but layoffs remain high

- By Christophe­r S. Rugaber

The number of laid- off Americans seeking unemployme­nt benefits fell last week to 787,000, a sign that job losses may have eased slightly but are still running at historical­ly high levels.

Last’s week’s figure was down from 842,000 the previous week, the Labor Department said Thursday. The government also revised down the number of people who sought aid in the two weeks before that. The total for the week that ended Oct. 3 was 767,000, the fewest since the viral pandemic erupted in March, though still more than three times the levels that preceded the pandemic.

In Colorado, new filings were virtual flat week to week.

In total, 8,708 people filed for state benefits or federal Pandemic Unemployme­nt Assistance for the week ending Oct. 17, according to the Colorado Department of Labor and Employment. That’s 66 fewer people than applied for support the week ending Oct. 10, a decrease of less than 1%.

New claims had been steadily rising week over week in October after reaching their lowest levels of the pandemic in September in Colorado. There are concerns the winter months will bring a spike in job losses along with cases of COVID- 19.

More than a quarter of a million Coloradans have now sought unemployme­nt support since mid- March, according to the department of labor.

A positive sign in recent weeks is that continuing claims totals, those filed by people who need ongoing support, are falling. For the week ending Oct. 10, 217,974 people on state and federal benefits programs filed continuing claims in Colorado. That’s down 6%, or more than 14,500 claims, from a week prior.

Economists welcomed the national declines as evidence that the job market is still recovering from the pandemic recession. But many cautioned that the improvemen­t could prove shortlived. With confirmed infections having neared 60,000 in the past week, the most since July, many consumers have been unable or reluctant to shop, travel, dine out or congregate in crowds — a trend that has led some employers to keep cutting jobs. Several states are reporting a record number of hospitaliz­ations from the virus.

“We doubt it will continue as COVID infections spread rapidly, pushing down demand for discretion­ary consumer services,

especially in the hospitalit­y sector,” said Ian Shepherdso­n, chief economist at Pantheon Macroecono­mics, referring to the portion of the economy that includes hard- hit hotels, restaurant­s and bars.

The downward revisions in applicatio­ns for unemployme­nt benefits reflect a sharp decline in California, which in recent months has accounted for one- fourth of the nation’s total jobless claims. California stopped processing new applicatio­ns for two weeks while it implemente­d anti- fraud technology and sought to process a huge backlog of claims. The state’s workforce agency is now reporting a sharp drop in the number of new applicatio­ns.

At the same time, many economists have grown skeptical of the accuracy of the government’s weekly figures for unemployme­nt claims. This is because of suspected fraud and concerns that some states are double- counting applicants in their regular unemployme­nt programs and in a new program that made contractor­s and gig workers eligible for jobless aid for the first time. In many states, contractor­s and gig workers must apply for aid under both to determine their eligibilit­y.

Still, it was an encouragin­g sign that applicatio­ns for jobless aid fell broadly last week, declining in 39 states while rising in 11. Applicatio­ns dropped nearly 12,000 in Florida, 10,000 in New York and 5,800 in Washington state.

Thursday’s report also said the number of people who are continuing to receive unemployme­nt benefits tumbled by 1 million to 8.4 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 three months.

Many jobless recipients are now receiving only regular state unemployme­nt payments because a federal weekly supplement of $ 300 has ended in nearly all states. And a $ 600- a- week federal benefit expired over the summer.

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%.

And some major companies keep announcing layoffs. Aramark, a food services contractor that provides concession­s at sports stadiums, said Wednesday that it would lay off 975 workers in Denver, most of whom worked at Coors Field, home of the Colorado Rockies. The company is also cutting 550 jobs in Kansas City.

Amtrak said at a congressio­nal hearing Wednesday that it would have to cut 2,400 jobs unless Congress approves emergency aid as part of another stimulus bill.

Yet negotiatio­ns in Congress over another round of financial aid have largely stalled, with little prospect for a deal before Election Day. Democratic House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin are continuing to negotiate. But Republican Senate Majority Leader Mitch McConnell has warned the White House against agreeing to a large package that would be opposed by most Senate Republican­s

Unless Congress can agree on a significan­t new rescue aid program, most economists expect growth to slow in the final three months of the year from a rapid rebound in the JulySeptem­ber quarter. That would mean a more prolonged recovery.

Congress’ failure to extend aid would also deepen the hardship for many of the jobless, who are struggling to pay bills with unemployme­nt checks that, on average, replace just one- third of their prior earnings. Nearly one in six renters — 11.8 million people — are behind, according to the Center on Budget and Policy Priorities.

The number of people whose state benefits have expired and are now receiving aid for an additional 13 weeks from federal and state extended benefit programs rose 600,000 last week to 3.7 million, the government said.

An additional 345,000 people applied for jobless aid under a separate program that made the selfemploy­ed, contractor­s and gig workers eligible for unemployme­nt benefits for the first time.

Both the extended aid and the jobless aid for contractor­s and gig workers will expire by year’s end. Millions of unemployed people would then be left without any benefits at all. An exception is in states with particular­ly high unemployme­nt, where laidoff workers can receive 13 more weeks of state aid.

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