New filings for jobless claims totaled 881,000 last week, better than estimates as the employment market continued its gradual progress during the coronavirus pandemic recovery.
Economists surveyed by Dow Jones had been looking for a total of 950,000.
The number reflects an improving labor market as well as a change in methodology from the Labor Department to address seasonal factors. Unique circumstances associated with the coronavirus likely caused jobless claims totals to be overstated during the pandemic.
While the number represented a drop from previous weeks, those totals were not revised, making comparisons difficult.
However, the department did note that claims for the week ended Aug. 29 did represent a decline from the previous week’s 1.011 million. Using the old methodology, the total would have been 1.02 million, according to Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Continuing claims fell sharply, dropping by 1.24 million to 13.254 million. The insured unemployment rate, a basic calculation of those getting benefits against the total labor force, fell by 0.8 percentage points to 9.1%.
The Labor Department changed its methodology from one that used seasonal adjustments to account for normal disruptions in the job market that don’t apply as much under the virus-related conditions.
The unadjusted total, which has consistently run below the adjusted numbers during the pandemic, was 833,352 last week, up nearly 8,000 from the previous week.
Claims under the Pandemic Unemployment Assistance program rose sharply last week to 759,482, an increase of 151,674, according to unadjusted figures. The program has provided benefits during the pandemic to those who normally wouldn’t be eligible for unemployment insurance.
“In short, the pace of layoffs still remains very high, and it appears that the proportion of newly laid-off people quickly finding another job is falling,” Shepherdson said.
At the state level, Florida saw the biggest decline for the week at 12,312, while California showed the biggest gain, at 39,958.
The total for workers receiving benefits, a number that is a week behind the current data, rose to 29.22 million for the week ended Aug. 15, up about 2.2 million from the week before.
The claims number comes a day ahead of the government’s closely watched nonfarm payrolls report for August. Economists expect 1.32 million more jobs to have been created and the unemployment rate to fall from 10.2% to 9.8%.
TAMPA, Fla (WFLA) – Florida has struggled in handling unemployment since the coronavirus arrived, and a new study shows that the recovery from unemployment may be just as difficult.
In a new report, WalletHub researchers identified which states were recovering the fastest from the 16.3 million Americans who are currently unemployed in the wake of the pandemic.
WalletHub compared the 50 states and the District of Columbia across three metrics based on changes in unemployment claims.
Florida was last on the list, with a 1,003.71% change in unemployment last week alone, compared to the same time frame last year.
The state also experienced a 2,511.66% increase in unemployment claims since March, compared to 2019.
Things seemed to take a positive turn last week when new claims in Florida were reported to be 55,106, but the number was later revised to 61,584.
One of many problems the state is having is getting its hospitality and tourism employees back to work, an industry that is suffering and makes up a significant portion of the state’s revenue.
Connecticut, Oregon, and New Jersey topped the list of states with the fastest unemployment recovery since the start of the pandemic, making dents in unemployment by helping residents get back to work.
Since the beginning of the pandemic, 57.4 million new unemployment claims have been filed, with an average of 135,000 per week, the Department of Labor reports.
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Weekly jobless claims hit their lowest level of the pandemic era, totaling 1.186 million last week, well below Wall Street expectations.
Economists surveyed by Dow Jones had been looking for 1.42 million. The level for the week ended Aug. 1 represented a drop of 249,000 from the previous period.
Amid worries that the employment picture was faltering after two record-breaking months of job creation, the claims number indicates some momentum. Continuing claims, or those who have collected benefits for two straight weeks, dropped by 844,000 to 16.1 million.
Markets reacted positively to the news, with Dow futures shaving almost all of their earlier losses as stocks looked to open about flat.
The last time the weekly claims number was this low was March 14, just as the coronavirus hit pandemic status and the U.S. economy came to a standstill in an effort to halt the spread. The totals since then have easily eclipsed anything seen before in records going back to 1967.
Even with this past week’s improvement, the total remains well above the pre-pandemic record of 695,000 in 1982.
“Both initial and continuing claims are at extremely high levels, and indicate that many employers continued to lay off workers in July,” PNC senior economist Bill Adams said in a note. “Further complicating the picture, the expiration of extended unemployment insurance benefits on July 31 may be clouding the signal from the claims data.”
The four-week moving average, which smooths volatility in the numbers, fell by 413,250 to 16.6 million. But the damage to the labor remains deep and this was the 20th consecutive week that claims have run above 1 million.
The total of those claiming benefits, which lags the current data by two weeks, rose to 32.1 million as of July 18, an increase of 1.3 million from the previous week.
Pandemic Unemployment Assistance recipients declined to 655,707, a fall of 253,093 from the previous week as the program expired July 31. The program provided benefits to those who normally wouldn’t be covered under traditional unemployment insurance. Congress and the White House are working on an extension of the program but have not reached an agreement yet.
The report comes a day ahead of the Labor Department’s nonfarm payrolls release for July. Economists expect it to show growth of nearly 1.5 million, though Wednesday’s private payrolls report from ADP, which showed a gain of just 167,000.
The past week’s improved showing from claims will not be reflected in the July count as it falls outside the Bureau of Labor Statistics’ sample week.
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WASHINGTON (Reuters) – The global novel coronavirus crisis continues to batter the U.S. labor market, with millions more Americans, including white collar workers, expected to have filed for unemployment benefits last week as the hit from the pandemic spills over into a broader swath of the economy.
FILE PHOTO: A woman looks for information on the application for unemployment support at the New Orleans Office of Workforce Development, as the spread of coronavirus disease (COVID-19) continues, in New Orleans, Louisiana U.S., April 13, 2020. REUTERS/Carlos Barria
Thursday’s weekly jobless claims report from the Labor Department, the most timely data on the economy’s health, would cement economists’ expectations for a third straight month of massive job losses in May. The report would come a day after Federal Reserve Chair Jerome Powell warned of an “extended period” of weak growth and stagnant incomes.
The economy lost a staggering 20.5 million jobs in April, the steepest plunge in payrolls since the Great Depression of the 1930s, as businesses were locked down to slow the spread of COVID-19, the respiratory illness caused by the virus.
“We are on the back end of the first wave of layoffs, but now we are transitioning from the natural-disaster phase to the recession phase,” said Josh Wright, chief economist at Wrightside Advisors in New York. “That’s why so many white collar jobs are still being lost. We effectively amputated a large section of the economy, and we are going to limp along afterwards.”
Initial claims for state unemployment benefits likely totaled a seasonally adjusted 2.5 million for the week ended May 9, according to a Reuters survey of economists. While it still would be an astoundingly high number, that would be down from 3.169 million in the prior week. Claims have been gradually decreasing since hitting a record 6.867 million in the week ended March 28.
Last week’s filings would lift the number of people who filed claims for unemployment benefits to about 36 million since March 21, nearly a quarter of the working age population. Still, April was probably the trough in job losses during this downturn, which has also been marked by the sharpest decline in output since the 2007-09 Great Recession.
In addition to workers in industries and jobs not initially affected by the coronavirus shutdowns, economists attribute the continued elevation in claims to the processing of application backlogs, which accumulated as state unemployment offices were overwhelmed by the unprecedented wave of applications.
Many parts of the country are reopening and states and local governments are laying out plans to restart their economies. But with businesses and factories operating well below capacity, and fears of a second round of COVID-19 infections, economists do not anticipate a dramatic improvement in the labor market.
Some businesses have accessed loans from an almost $3 trillion fiscal package, which could be partially forgiven if they used the credit for employee salaries. But many small enterprises are expected to close permanently, leaving some of the 21.4 million people who lost their jobs in March and April out of work.
To gauge the depth of the unemployment problem, attention will shift to the number of people staying on jobless benefits rolls.
Thursday’s claims report is expected to show the number of people receiving benefits after an initial week of aid raced to a record 25.1 million in the week ended May 2 from 22.647 million in the prior week, according to the Reuters survey.
The so-called continuing claims data is reported with a one-week lag.
“We would expect a peak should arrive sometime in late May or June, with continuing claims falling as rehiring resumes,” said Andrew Hollenhorst, an economist at Citigroup in New York. “The speed of the decline will indicate how fast rehiring is occurring.”
The unemployment rate jumped to 14.7% in April, breaking the post-World War Two record of 10.8% touched in November 1982, from 4.4% in March.
A broader measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment, surged to 22.8% last month from 8.7% in March.
Reporting By Lucia Mutikani; Editing by Chizu Nomiyama
Unemployment rolls continued to swell in the U.S. last week, though jobless claims hit their lowest level since the economy went into lockdown made to battle the coronavirus pandemic.
First-time filings for unemployment insurance hit 3.17 million last week, bringing the total to 33.5 million over the past seven weeks, the Labor Department reported Thursday. The total was slightly higher than the 3.05 million expected by economists surveyed by Dow Jones and below the previous week’s 3.846 million, which was revised up by 7,000.
Though the numbers remain stark, it was the lowest total since the second week of March, shortly after the World Health Organization declared the coronavirus strain a pandemic.
Stock market futures reacted little to the data and continued to indicate about a 300-point gain at the open for the Dow Jones Industrial Average.
The four-week moving average, which smooths volatility in the numbers, slid to 4,173,500, a decrease of 861,500 from the previous week’s average and a further indicator that the worst of the jobs news may be over. Numbers not adjusted for seasonality showed a total of 2.85 million claims, a decrease of 646,613, or 18.5%, from the previous week. Some economists think the unadjusted numbers are more relevant for the current unprecedented situation as they are not as affected by seasonal factors.
Florida was most responsible for the big dip in unadjusted numbers, reporting about 260,000 fewer claims over the past week. Maryland reported a jump of 27,337.
At the current pace, the week claims numbers should fall below 1 million by mid-June, according to Ian Shepherdson, chief economist at Pantheon Macroeconomics. “We’re very hopeful that June will see the beginnings of a rebound as states begin to reopen,” Shepherdson said.
The advance number of actual initial claims under state programs, unadjusted, totaled 2,849,090 in the week that ended Saturday, a decrease of 646,613 (or -18.5 percent) from the previous week. However, continuing claims, or those who have filed within at least the last two weeks and are still on the rolls, rose 4.6 million to 22.6 million.
The jump in continuing claims “is a little disappointing since it suggests few people are being recalled to work,” said Paul Ashworth, chief U.S. economist at Capital Economics.
The layoffs associated with social distancing practices have wiped out all of the job gains the economy has seen since the recovery from the Great Recession.
The latest jobless claims numbers come a day before the Labor Department releases its nonfarm payrolls report for April. Economists surveyed by Dow Jones expect a plunge of 21.5 million, easily the worst month in U.S. history, with the unemployment rate surging to 16%.
There was another indication Thursday that the jobs picture will remain difficult.
Outplacement firm Challenger, Gray & Christmas reported that announced layoff intentions from companies in April jumped to 671,129, the highest number since tracking began in January 1993.