By Eric Morath 

The number of people applying for jobless aid in the U.S. is expected to have held steady for the fifth straight week, a sign that this summer's accelerating labor market downshifted in September.

Weekly initial claims for unemployment benefits through regular state programs have stabilized just below 900,000 since the last week of August. Those totals remain well above pre-pandemic peaks but are down significantly from March, when the coronavirus pandemic and related shutdowns caused 6.9 million claims in a single week.

In a positive sign, the number of people receiving benefits through state programs has continued to decline in recent weeks. That is consistent with many employers recalling workers furloughed earlier this year, and some, such as online retailers and logistics companies, adding staff.

Still, the level of new claims shows layoffs remain persistent in some industries. Airlines, cruise lines, restaurant chains, theme parks and manufacturers are among the employers recently announcing layoffs, according to outplacement firm Challenger, Gray & Christmas Inc.

"There are some companies that are really struggling, making permanent cuts that before we thought were temporary," said Senior Vice President Andy Challenger. "A lot of the cuts now are related to economic conditions, not jobs that were paused due to Covid-19."

Walt Disney Co. on Wednesday announced permanent layoffs for 28,000 theme park workers who were previously on temporary furlough. About 9,000 New York City government workers were ordered to take five-day furloughs in the coming months. And so far this year, 29 retailers filed for bankruptcy and collectively announced nearly 6,000 store closures.

The claims levels match with other indicators suggesting labor-market improvement is slowing.

Economists surveyed by The Wall Street Journal project Friday's jobs report will show employers added 800,000 jobs in September. While that is a strong gain compared with pre-pandemic figures, it would mark the first month since April that net hiring hasn't exceeded 1 million. Employers through August have replaced about 11 million jobs of the 22 million shed in March and April at the beginning of the pandemic.

Economists expect the unemployment rate ticked down to 8.2% in September from 8.4% the previous month. The rate had been falling at a faster pace in prior months from April's 14.7% peak.

Even with fresh layoffs, there are jobs available, said Becky Frankiewicz, president of staffing firm ManpowerGroup North America, who said job openings have increased since May.

"We're not back to where we were last year," she said. "But we've made dramatic progress from the middle of the crisis." She added that there has been an increase in jobs in the logistics, e-commerce and medical fields, and for those with information-technology skills.

ManpowerGroup's recent employer survey showed 20% intended to increase staff in the fourth quarter, up from 17% in the third quarter. "Some companies are readying themselves for an expected increase in demand."

Ms. Frankiewicz said those responses likely indicate plans to hire outside candidates, rather than recall previously furloughed staff.

To attract workers, employers are increasingly allowing new hires to work remotely and have lowered job requirements in some cases, she said.

"Just because there's a lot of people unemployed doesn't mean there's a lot of people willing to come to work," Ms. Frankiewicz said, noting safety concerns and child-care challenges.

Employment trends mirror the broader economy. Economists project the U.S. economy grew this summer, but don't expect that pace to persist into the fall.

The Labor Department's weekly unemployment benefits report provides data on regular state programs -- which have served as an economic bellwether for a half-century -- as well as details from two pandemic-specific programs first implemented in March.

The larger of those programs -- available to the self-employed, gig workers and others not typically eligible for unemployment aid -- paid benefits to about 11.5 million workers in early September, according to the Labor Department. However, analysts are skeptical about that figure, which has trended near the number of people paid under state programs, which insures about 146 million workers. At the end of last year, there were about 10 million self-employed workers, according to the Labor Department

A second pandemic program pays 13 additional weeks of benefits to individuals who have exhausted regular unemployment benefits. Enrollment in that program has edged higher in recent weeks. That suggests that some of the decline in state-benefit recipients represents workers who have exhausted the maximum amount of payments available through those programs, which is six months in many states.

Congress also authorized federal funding for an extra $600 a week in unemployment benefits on top of amounts paid by states. Those benefits expired at the end of July. In early August President Trump issued an executive action allowing states to tap $44 billion disaster-relief funds for $300 a week in enhanced aid. The federal government authorized 49 states to make payments to eligible claimants for no more than six weeks from the week ended Aug. 1. South Dakota didn't apply for the funds.

Write to Eric Morath at eric.morath@wsj.com

(END) Dow Jones Newswires

October 01, 2020 05:44 ET (09:44 GMT)

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