The number of Americans applying for state unemployment benefits unexpectedly dropped last week, falling below 800,000 for the first time since the coronavirus pandemic shut down the nation's economy in mid-March.
The latest jobless claims figures from the Labor Department, which cover the week ending Oct. 17, show that 787,000 workers sought aid last week, about four-times the pre-crisis level. Close to 65 million Americans ‒ roughly 40% of the nation's labor force ‒ have sought jobless aid since the coronavirus lockdowns began in mid-March.
Jobless claims have not been this low since the week ending March 14, when 282,000 Americans filed for aid, shortly before the virus-induced crisis triggered a flood of layoffs.
Economists surveyed by Refinitiv expected 860,000 new claims.
The number of people who are continuing to receive unemployment benefits fell to 8.37 million, a decline of about 1 million from the previous week. The decline suggests that employers are calling their workers back.
"The numbers are noisy, but weekly unemployment claims came in below 800,000, which is still good news for Americans who have seen those claims settle in at levels about four times what we saw just one year ago," Robert Frick, corporate economist at Navy Federal Credit Union, said.
Still, some of the declines in so-called continuing claims may represent workers who have used up the maximum number of payments available through state unemployment programs (typically about six months) and are now receiving benefits through a separate federal program that extends the aid by 13 weeks. Congress created the extra federal benefits earlier this year with the passage of the CARES Act.
The latest report comes amid as White House officials and Democratic leaders try to overcome a monthslong impasse and strike a coronavirus relief deal ahead of the November election.
The stalemate has dragged on for months and has put at stake potentially trillions of dollars in aid for workers and businesses still reeling from the crisis, including extended unemployment benefits, a second direct payment and another round of funding for small businesses.
There are still roughly 10.7 million more out-of-work Americans than there were in February, before the pandemic hit.
This is a developing story. Please check back for updates.