December 5, 2020

US weekly jobless claims edge lower to 840,000 as labor-market recovery trudges along

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  • New US jobless claims for the week that ended Saturday totaled 840,000, the Labor Department said Thursday. The reading landed above the consensus economist estimate of 820,000 but marked a slight decline from the previous week’s revised figure.
  • Continuing claims, which track Americans receiving unemployment benefits, fell to 11 million for the week that ended September 26. That was also lower than economist expectations.
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The number of Americans filing for unemployment benefits edged lower last week in a modestly encouraging sign for the labor market’s prolonged recovery.

New US weekly jobless claims totaled an unadjusted 840,000 for the week that ended Saturday, the Labor Department announced Thursday. That reading came in above the median economist estimate of 820,000 compiled by Bloomberg, but reflects a slight decrease from the previous week’s revised figure.

Continuing claims, which track the aggregate total of Americans receiving unemployment benefits, declined to 11 million for the week that ended September 26. The reading came in below the median economist estimate of 11.4 million.

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The roughly 64 million unemployment-insurance filings made since early February handily overshadow the 37 million filings made during the 18-month long Great Recession. Though Thursday’s reading comes as claims steadily trend lower, the sum is still greater than the 665,000 filings made during the Great Recession’s worst week.

The latest report is the first to come after the Bureau of Labor Statistics released monthly nonfarm payrolls data for September. The unemployment rate fell to 7.9% last month from 8.4%, beating the expected reading of 8.2%.

Payroll additions, however, reached 661,000, far below the economist estimate of 859,000 new jobs. The report revealed a fifth-straight month of job additions but still pointed to a slowing pace of recovery for the nation’s labor market.

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Those still unemployed also face a tougher economic backdrop as they search for work. The federal government’s expansion to unemployment benefits is long expired, and aid established in the March CARES Act is largely exhausted. Without new stimulus from Congress, jobless Americans face diminished spending power as the coronavirus pandemic continues to stifle economic activity.

Fresh stimulus isn’t likely to arrive any time soon. President Donald Trump on Tuesday abruptly froze negotiations on a new bill, tweeting that talks would resume after the November 3 election. He later called on Congress to pass smaller bills to fund the Paycheck Protection Program, airline relief, and another round of stimulus checks. Yet Democrats are poised to stand by their own $2.2 trillion deal, leaving stimulus back in the stalemate seen since the summer.

With little hope for new relief, experts fear the economic recovery will weaken further heading into 2021. Letting the nation trudge on without renewed Congressional support is like “letting the forest fire just rage,” Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis, said in a Wednesday appearance on CNBC.

“Eventually it’ll burn itself out, and meanwhile all the animals are dead,” he added. “I mean, there are enormous consequences if we just let things go, and the downturn will end up being much, much worse.”

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