Unemployment applications remain high as job market stalls
The number of Americans applying for first-time jobless aid dipped last week but remained at a high level, indicating ongoing woes in the job market.
Some 840,000 adults filed initial unemployment claims in the week ended October 3, the Labor Department said Thursday. That figure, adjusted for seasonal variation, was down by 9,000 claims from the prior week and was in line with economists' forecasts.
Another 464,000 people applied for Pandemic Unemployment Assistance, a broader program intended for self-employed and gig workers. This was the first time in two months that applications for self-employed aid dipped below half a million.
Still, the number of jobless applications is significantly higher than it was at the peak of the Great Recession. All told, 25.5 million people were receiving some form of unemployment aid in the week that ended September 19, the latest period for which data is available, the Associated Press reported.
Underscoring the fragility of industries battered by the coronavirus, large companies including American Airlines, United Airlines and Disney have recently announced tens of thousands of jobs cuts.
Economists are also concerned about the impact of colder weather on the coronavirus pandemic and the toll it could take on the labor market.
"If cooler weather pushes infections up again as people move indoors, the very modest decline in jobless claims could easily become a renewed spike," Ian Shepherdson of Pantheon Macroeconomics said in a report. "Either way, they are far too high, still well above the 665,000 peak — for one week — seen after the crash of 2008."
This week's figures are less reliable than usual since California, the state with the most unemployment applications, has paused new filings for two weeks while it works out its backlog of claims.
No stimulus lifeline
Across the country, hiring has slowed just as federal relief aid has run out, hampering an economy still reeling from the pandemic. Employers added 661,000 jobs in September, less than half of August's gain and the third straight monthly decline.
At the same time, Congress and the White House are at loggerheads over talks to inject another round of stimulus into the economy. Federal Reserve Chairman Jerome Powell warned earlier this week that a slowing economy could create a "downward spiral" leading to further job cuts and urging lawmakers to pass a stimulus package.
Just over half the 22 million jobs lost to the coronavirus have been recovered, leaving the economy with 10.7 million fewer jobs than in February — a figure that exceeds all the job losses from the 2008-2009 Great Recession.
"The suffering facing the unemployed still reaches far and wide, and the failure to provide any aid for American workers will reverberate throughout the economy," Andrew Stettner, a senior fellow at The Century Foundation, said in a statement.