U.S. Jobless Claims Hold Steady at 870K In Sept. 19 Week -- 2nd Update
By Sarah Chaney
The number of applications for unemployment benefits has held
steady in September at just under 900,000 a week, suggesting the
labor-market recovery is stalling as layoffs restrain hiring gains
six months into the pandemic.
Jobless claims increased slightly to 870,000 last week from
866,000 a week earlier, according to Thursday's Labor Department
report. The totals remain well above pre-pandemic peaks but are
down significantly from nearly 7 million in March.
The elevated number of claims is a sign that layoffs have
continued at a high rate. Some employers that held on to workers at
the beginning of the economic crisis are now reducing their head
counts due to persistently weak demand.
At the same time, many workers are also returning to their
previous jobs or finding new ones, helping bring down the jobless
rate to 8.4% from near 15% in April and spur hiring gains.
Re-employment has also contributed to a decline in the number of
people collecting unemployment benefits through regular state
programs, which cover most workers. So-called continuing claims
decreased by 167,000 to about 12.6 million for the week ended Sept.
Taken together, elevated layoffs and continued rehiring point to
an economy that is slowly healing.
"The labor market is not out of the woods yet. It's still a very
challenging and weak labor market, but that said...it's moving in
the right direction," said Kathy Bostjancic, an economist at Oxford
Millions of workers are collecting jobless benefits through a
federal pandemic program for the self-employed, gig workers and
others not typically eligible for unemployment aid. At the
beginning of September, about 11.5 million people were claiming
benefits through this program, a decrease of about 3 million from a
week earlier, driven by a large drop in California, according to
the Labor Department. Many economists are skeptical about the
accuracy of pandemic claims figures, given the sharp revisions to
the numbers and widespread unemployment fraud tied to the
Swaths of the economy are showing signs of slowly regaining
ground as the pandemic passes its half-year mark. Consumer spending
and job gains continued in August but at a slower pace than earlier
in the summer. U.S. service-sector and manufacturing companies
reported solid but cooling growth in September. Earlier this week,
Federal Reserve officials implored Congress to enact more fiscal
stimulus to boost the speed of the recovery.
Economists expect the initial hiring spurt from business
reopenings to ease as state restrictions are lifted at a slower
pace than in early summer.
"We're getting to that point where the easy hiring is behind
us," said Ryan Sweet, an economist at Moody's Analytics. "This next
leg of the recovery is going to be much more driven by the
underlying strength of the economy rather than businesses just
Many employers brought back a portion of their furloughed
employees but are finding sales are too weak to raise employment to
Peter Merriman reopened four of the nine restaurants he owns
across Hawaii in August, but slow sales meant he could hire back
only about 40% of the staff who were working at those locations
before the pandemic began. He said sales at those restaurants,
which operate under the Merriman's Restaurants brand, are down
about 80% from the same period last year.
"It's really scary," Mr. Merriman said. "We know that we'll
eventually come back, it's just a question of when and how."
Many workers are experiencing monthslong spells of unemployment.
In the first week of September, about 1.6 million individuals were
collecting benefits through a federal program that provides an
additional 13 weeks of benefits for people who run through the
benefits' duration set by states. Benefits last for six months in
In addition to the federal emergency programs, Congress also
passed legislation this spring authorizing federal funding for an
additional $600 a week in unemployment benefits. After those
benefits expired, President Trump signed an executive order last
month to replace them with an additional $300. The $300 top-off
payments will only last up to six weeks, and Congress has yet to
reach an agreement on a new federal jobless benefit.
--Kim Mackrael contributed to this article.
Write to Sarah Chaney at email@example.com
(END) Dow Jones Newswires
September 24, 2020 11:11 ET (15:11 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.