Jobless claims drop to 837,000 as the slow recovery continues

Jobless claims drop to 837,000 as the slow recovery continues

The Ministry of Labor said on Thursday that unemployment insurance claims for the first time totaled 837,000 last week, as the labor market continues its precipitous recovery from the coronavirus pandemic.

Economists surveyed in the Dow Jones were expecting 850K. The weekly total represents a decrease of 36,000 from the previous week’s upward revision of 870,000, according to seasonally adjusted numbers.

It was the fifth consecutive week that claims fell below a million after staying there for five months after the Covid-19-related economic shutdown in mid-March. However, the total is still well above anything the United States has experienced since before the crisis.

The ongoing claims provided some good news, with those collecting benefits for at least two weeks dropping by 980,000 to 11.77 million. The number of continuing claims extends after a week.

However, the overall trend remains stubbornly high, with the four-week moving average of claims down for the first time by just 11,750 to 867,250. Before the pandemic, weekly claims were around 200,000.

Moreover, the job numbers are somewhat distorted by the state of California which announced that it will stop for two weeks from processing claims as it looks to “implement fraud prevention technology,” the Department of Labor said.

The number of those collecting benefits under the Pandemic Unemployment Assistance Program rose to 650,120. The program provides payments to those who would not normally qualify for benefits, such as freelancers and independent contractors.

The total number of all those collecting benefits under various government programs rose by half a million to 25.53 million for the week ending September 12th.

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More than two-thirds of individual states reported a decline last week, according to unadjusted data. The largest drop came from Florida, with 9668, and Texas, with 8,353.

The claims number comes a day ahead of the closely watched nonfarm payrolls report. The Labor Department is expected to announce a job increase of 800,000 for the month of September, which will mark a slowdown from August of 1.37%, according to Dow Jones.

The unemployment rate is expected to decline by one-tenth of a percentage point to 8.2%.

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