By Sarah Chaney and Kim Mackrael
The number of applications for unemployment benefits has held
steady in September at just under 900,000 a week, as employer
uncertainty about the economic recovery six months into the
coronavirus pandemic continued to restrain hiring gains.
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 labor market has added jobs in the prior four months after
steep declines in employment at the beginning of the pandemic,
helping bring down the jobless rate to 8.4% in August from near 15%
in April. But the pace of gains has slowed recently, and
persistently elevated jobless claims in September point to
continued cooling in the jobs market.
One reason is 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. A rise in coronavirus cases this summer also triggered new
business restrictions and related layoffs, and some small
businesses that had relied on government aid to keep workers on
payrolls had to cut staff when that money ran dry. The Labor
Department will provide an updated look at the jobs market in
September on Oct. 2.
At the same time, many workers are also returning to their
previous jobs or finding new ones, but not at a high enough rate to
offset overall job losses from earlier in the pandemic.
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.
"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
Unemployment rates in regions across the nation moved down this
summer after peaking in April, when the coronavirus first triggered
widespread lockdowns. Still, jobless rates remained particularly
high, on average, in the Northeast and West, and clocked in above
10% in 10 states in the U.S. last month.
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
Large 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
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
Taylor Bakley lost her part-time hosting job at a restaurant
when the pandemic started, and hasn't been able to find work since
then. Ms. Bakley, who lives in Big Spring, Texas, said she has
applied for nearly two dozen jobs since she finished high school in
May, including a cashier position at the Dollar General.
"I've been applying like crazy, but it's so hard to get a job
right now, " she said.
Ms. Bakley, 18 years old, said she is living with her
grandmother and isn't expected to pay rent, but still has to pay
her car bills and insurance and is hoping to save money for
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.
Write to Sarah Chaney at email@example.com and Kim Mackrael
(END) Dow Jones Newswires
September 24, 2020 15:48 ET (19:48 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.