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Applications for U.S. state unemployment benefits fell by the most in five weeks, signaling the gradual recovery in the labor market is continuing despite a record surge in Covid-19 infections.
Initial jobless claims in regular state programs totaled 709,000 in the week ended Nov. 7, down 48,000 from the prior week, Labor Department data showed Thursday. On an unadjusted basis, the figure decreased by about 21,000.
Read more: Bloomberg’s TOPLive blog on Thursday’s U.S. data
Continuing claims — the total number of Americans claiming state unemployment assistance — fell by 436,000 to 6.79 million in the week ended Oct. 31. But the number of people claiming support in programs offering extended assistance continued to increase as more Americans exhausted their regular state benefits.
The main figures were below economists’ projections for 731,000 initial claims and 6.83 million continuing claims, according to the median estimates in Bloomberg surveys.
While initial claims remain more than triple pre-pandemic levels, the data suggest the labor-market rebound is holding up after a stronger-than-forecast jobsreport for October. Gains could prove more challenging in coming months, amid signs that colder weather and the coronavirus’s uncontrolled spread are further discouraging activities like indoor dining and travel, while the lack of fresh government stimulus challenges many households and businesses.
“On the surface it looks good,” Deutsche Bank AG economist Brett Ryan said of the headline numbers. However, “if you just looked at initial and continuing claims it would overstate the improvement in the labor market. It’s still improving, but not as much as the data would say at face value.” He cited the recent increases in Americans on extended benefits.
The S&P 500 index of stocks fell at the open, while Treasury yields remained lower and the dollar was little changed.
What Bloomberg’s Economists Say…
“Claims are well above pre-pandemic levels and rising infections pose downside risk. Developments on the pandemic front will shape the economy as fiscal aid remains in limbo.”
— Eliza Winger, associate
For the full note, click here
The number of Americans receiving Pandemic Emergency Unemployment Compensation, the 13-week program for those who have exhausted state benefits, increased about 160,000 to 4.14 million in the week ended Oct. 24.
Continuing claims for Pandemic Unemployment Assistance, which provides benefits to self-employed and gig workers, increased about 101,000 to 9.43 million. In total, 21.2 million Americans were claiming some kind of unemployment benefit — which includes state programs, extended benefits, work-sharing and PUA — during the week ended Oct. 24, down slightly from the prior week.
“I can’t stress enough that 700,000 initial claims a week is an extraordinarily high number,” Lewis Alexander, chief U.S. economist at Nomura Securities International Inc., said on Bloomberg Television. “The fact that continuing claims are stable in an environment where you have that level of initial claims means that there’s a lot of hiring going on as well. And we still are just in a very disrupted state.”
A separate report Thursday showed that the consumer price index was unchanged in October, below forecasts that called for a modest gain, reflecting cheaper gasoline, declining medical-care costs and lower clothing prices.
For initial jobless claims, the biggest declines last week were in Georgia, Kentucky and Texas. States reporting increases included California, Washington and Massachusetts.
— With assistance by Chris Middleton, Sophie Caronello, Edith Moy, Jarrell Dillard, and Henry Ren
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