The number of Americans applying for state unemployment benefits remained historically high last week, indicating the pace of layoffs is still elevated even as the economy slowly recovers from the coronavirus pandemic.
The latest jobless claims figures from the Labor Department, which cover the week ending Oct. 2, show that 840,000 workers sought aid last week, about four-times the pre-crisis level. More than 63 million Americans have sought jobless aid since the coronavirus lockdowns began in mid-March.
Economists surveyed by Refinitiv expected 820,000 new claims. Last week's figure was revised upward by 12,000 to 849,000.
The number of people who are continuing to receive unemployment benefits fell to 10.97 million, a decline of more than 1 million from the previous week.
But there's a caveat to the data: California paused processing initial claims for two weeks in an effort to clear a backlog and adopt fraud-prevention technology, the Labor Department said. This week’s report reflects the level during the last week before the pause and will be adjusted accordingly at a later date.
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.
Several large employers have implemented thousands of job cuts. Disney laid off 28,000 workers, mostly at its two U.S. theme parks. Royal Dutch Shell said it planned to cut between 7,000 and 9,000 jobs by the end of 2022, and U.S. airlines cut 35,000 workers as federal coronavirus aid expired.
"Putting a damper on forecasts for broad, near-term economic improvement are the rising numbers of COVID-19 cases in the U.S. and the dim prospects for further substantial federal relief legislation," said Mark Hamrick, Bankrate's senior economic analyst. "Many Americans are still facing the prospect of layoffs, and businesses of all sizes are facing the threat of failure, reduced sales and or capacity."
The report comes two days after President Trump abruptly broke off negotiations on another coronavirus relief package. He later appeared to reverse course, calling for lawmakers to send out a fresh round of $1,200 stimulus checks and provide additional funding to U.S. airlines and small businesses.
"The House & Senate should IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support, & 135 Billion Dollars for Paycheck Protection Program for Small Business. Both of these will be fully paid for with unused funds from the Cares Act. Have this money. I will sign now!" Trump tweeted Tuesday night.
"If I am sent a Stand Alone Bill for Stimulus Checks ($1,200), they will go out to our great people IMMEDIATELY. I am ready to sign right now. Are you listening Nancy?" he posted about 30 minutes later.
“Even if policy actions ultimately prove to be greater than needed, they will not go to waste," Powell said Tuesday in a prepared speech to the National Association for Business Economics. "The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods."
There are still roughly 10.7 million more out-of-work Americans than there were in February before the pandemic hit.