By Eric Morath
New applications for unemployment benefits this month fell to
the lowest levels since March, when the coronavirus pandemic
derailed the economy, showing a sign of improvement for the U.S.
Weekly initial claims for jobless benefits fell by 55,000 to a
seasonally adjusted 787,000 in the week ended Oct. 17, the Labor
Department said Thursday. Claims for the prior two weeks were
revised lower, reflecting new data from California. The revised
level of claims for the week ended Oct. 3 -- 767,000 -- was the
lowest since the March 14 week, when less than 300,000 new claims
The Labor Department said California last week resumed reporting
actual unemployment insurance claims data, which reduced the
overall number of claims in October. The state had paused
processing of jobless applications to address a backlog and step up
"The labor market continues to grind toward recovery," Jefferies
LLC economist Thomas Simons wrote in a note to clients. Before the
revisions, claims data was "hinting that the labor market had hit a
pothole in its recovery. That no long seems to be the case," he
The number of people collecting unemployment benefits through
regular state programs, which cover most workers, decreased by 1
million to about 8.4 million for the week ended Oct. 10, also the
lowest since March. That is consistent with many employers
recalling workers furloughed earlier this year, and some, such as
online retailers and logistics firms, adding staff.
However, it also reflects some long-term unemployed workers
losing eligibility for such programs, which typically are capped at
six months or less. A separate program offering extended benefits
to those affected by the pandemic exceeded 3 million this month,
the highest since the program started in March.
New applications for unemployment benefits and payments still
remain above pre-pandemic peaks but are down significantly from
this spring, when the coronavirus pandemic and related shutdowns
caused both measures to rise to the highest levels on record back
to the 1960s.
The labor market broadly had a strong, but partial, rebound this
summer, regaining through September more than half the 22 million
jobs lost in March and April. But the pace of those gains eased in
recent months. That is consistent with economists expecting a
prolonged period of slow recovery.
Most economists The Wall Street Journal surveyed earlier this
month said they didn't expect the labor market to claw back all the
jobs lost as a result of coronavirus-related shutdowns until 2023
or later. That was a slower timeline than economists predicted six
Companies ranging from American Airlines Group Inc. and United
Airlines Holdings Inc. to Walt Disney Co. and AT&T Inc.'s
WarnerMedia have announced job cuts in recent weeks, and those
layoffs may have affected filed claims last week. Meanwhile,
businesses such as restaurants, gyms and theaters are closing doors
due to what appears to be a prolonged slump for services and
products that rely on public gatherings.
"The economy has been allowed to open back up," said Alfredo A.
Romero, economist at North Carolina A&T State University. "But
the question remains if people will be willing to come back, to eat
a restaurant or shop at a mall, especially now that the colder
weather is coming and cases are rising."
Still some employers are struggling to fill job openings, said
Chris Ashcraft, owner of three Express Employment Professionals
staffing offices in Alabama and Georgia.
His offices have placed more than 100 workers in the past few
weeks at jobs in distribution centers and automotive and seafood
processing plants. Many of those jobs pay $15 an hour, he said, up
from $10 or $11 an hour a year ago. The better pay reflects an
effort to attract people back to the workforce who may be worried
about becoming ill or have child-care challenges.
"When Covid hit, everything just stopped," he said. "But from
August until now, we've been growing. It's like coming out of a
recession, but even faster."
While the number of posted jobs have increased from this spring,
they remain 15.3% lower than a year earlier, as of Oct. 16,
according to job search site Indeed.com.
Thursday's report from the Labor Department provides data on
regular state programs -- which have served as an economic
bellwether for a half-century -- as well as details from
pandemic-specific programs first implemented in March.
The largest of those programs -- available to the self-employed,
gig workers and others not typically eligible for unemployment aid
-- paid benefits to 10.2 million workers in the Oct. 3 week,
according to the Labor Department. The pandemic figures aren't
adjusted for seasonality and reported with a delay. That number
exceeded those receiving benefits from state programs, 9 million on
an unadjusted basis that week, which cover more than 140 million
Analysts are skeptical about the figures for the new program. At
the end of last year, there were about 10 million self-employed
workers, according to the Labor Department.
Jeremy Terlecki, 37 years old, is among those facing a prolonged
spell of unemployment. He has been receiving jobless benefits since
shortly after he was laid from an engineering job in the
oil-and-gas industry in Bakersfield, Calif. "Everything seemed to
be going well with the economy and my job, then it changed so
fast," he said. "Now jobs are difficult to find...I don't think
it's going to be an immediate comeback."
Mr. Terlecki moved with his 4-year-old daughter back to his home
state of Louisiana, in hopes of better job opportunities, and is
living with his sister. He said employers have expressed some
interest in hiring him, but he hasn't received an offer. He thinks
companies are waiting until after the presidential election or even
early next year before making commitments. Mr. Terlecki is
considering relocating again, to Houston, if he doesn't find work
"I'm trying to stay afloat but I'm paying $1,000 a month in
health insurance," he said. "That hurts."
Write to Eric Morath at email@example.com
(END) Dow Jones Newswires
October 22, 2020 10:36 ET (14:36 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.