The number of laid-off Americans applying for unemployment benefits fell again last week, reflecting a steady — if slow — recovery from the coronavirus pandemic and a new government technique in measuring claims.
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The latest jobless claims figures from the Labor Department, which cover the week ending Aug. 29, show that 881,000 workers sought aid last week, pushing the total number since the shutdown began to more than 59 million.
Economists surveyed by Refinitiv expected 950,000 new claims.
The drop in claims is likely the result of an improving jobs market, as well as the department changing the way it adjusts state jobless claim figures for seasonal patterns, such as accounting for temporary holiday workers who are laid off in January, or school employees who are let go in June. The tweak is intended to improve the figure's accuracy. (One estimate from IHS Markit said that if the Labor Department had used this calculation method since the beginning of the pandemic, claims would be roughly 4 million lower since mid-March).
Although the figure marks a drop from last week's number, those numbers were unrevised, making it difficult to compare: For the week ending Aug. 22, the unadjusted figures show that 821,591 new claims were filed, while the seasonally adjusted figure was a little more than 1 million.
“Initial unemployed insurance claims rose slightly to 833,352 on a non-seasonally adjusted basis from the prior week," said Daniel Zhao, senior Glassdoor economist. "Any stagnation or backpedaling of UI claims at such historic highs is severely troubling at this stage of a recovery and will likely remain as recent natural disasters across the U.S. compound with announced layoffs from several large employers."
Continuing claims, the number of people receiving benefits after an initial week of aid, fell sharply by 1.24 million to a little more than 13.2 million.
Roughly 1 million unemployed Americans have been seeking aid each week for the past six months, when the COVID-19 crisis triggered an unprecedented shutdown of the nation's economy, pointing to a sluggish turnaround. It's down from the peak of more than 6 million claims in late March, but remains well above the 200,000 reported in February. Before the pandemic, the record high was 695,000, set in 1982.
"This latest report adds to a growing list of indicators pointing towards an overall plateau and a long road still ahead for the labor market," Zhao said.
Several large employers have also recently warned of job cuts. United Airlines said Wednesday it planned to furlough 16,370 employees amid a plunge in passenger demand, Ford Motor is offering buyouts to salaried employees with the goal of cutting 1,400 workers, MGM Resorts is laying off 18,000 workers and Coca-Cola is offering buyouts to 4,000.
Economists have urged Congress to overcome a month-long stalemate and pass another round of emergency relief for workers and businesses reeling from the pandemic and have warned that without additional stimulus, the recovery could stall out.
On Friday, when the government issues the more closely watched jobs report for August, it’s expected to show the economy added 1.4 million jobs last month, pushing the unemployment rate down to 9.8%. Employers have so far added back only about 42% of jobs lost to the pandemic, leaving the economy roughly 10 million short of where it sat in February.