By Kim Mackrael
The pace of the labor market recovery showed fresh signs of
cooling last week, with new applications for unemployment benefits
holding nearly steady as virus cases surged in several states.
Weekly initial claims for jobless benefits fell by 7,000 to a
seasonally adjusted 751,000 in the week ended Oct. 31, the Labor
Department said Thursday. That was the lowest level since
mid-March, but was well above the 217,000 claims filed in late
February, before economic shutdowns to control the spread of the
new coronavirus began.
The previous week's data were revised up by 7,000 to
"The level of filings is trending down over time, but this
downward trend has flattened noticeably," JPMorgan Chase & Co.
economist Daniel Silver wrote in a note to clients. "This is
consistent with the idea that the labor market continues to
recover, but that the pace of improvement has moderated."
More broadly, the labor market has recouped more than half of
the 22 million jobs that were lost in March and April, but the pace
gains slowed in recent months.
Employers added 661,000 jobs in September, down from a 1.5
million gain in August. Economists surveyed by The Wall Street
Journal forecast Friday's jobs report to show employers added
530,000 jobs in October. Economists expect the unemployment rate to
edge down to 7.7% from 7.9% in September.
Many workers experienced temporary layoffs this spring, but in
some industries changes appear to be longer term. Last week, Boeing
Co. said it would reduce its workforce by another 11,000, including
7,000 layoffs, as the aerospace company grapples with sharply lower
demand for international and domestic air travel. Oil giant Exxon
Mobil Corp. said it would cut 1,900 jobs in the U.S.
Thursday's jobless claims report showed the number of people
collecting unemployment benefits through regular state programs,
which cover most workers, decreased by 538,000 to about 7.3 million
for the week ended Oct. 24. That was also the lowest level since
March, reflecting that many laid-off workers have been recalled to
jobs or hired elsewhere, and that some have exhausted state
Rising cases of Covid-19, the disease caused by the new
coronavirus, could pose a threat to job gains, economists say, if
consumers become more cautious and more states bring back
The seven-day moving average of reported Covid-19 infections in
the U.S. reached a record on Wednesday and daily case counts are on
the rise in most states, according to data from Johns Hopkins
University. Some jurisdictions, including Maine and Massachusetts,
recently tightened limits on indoor gatherings.
"As these last few weeks have shown us, the pandemic is not
over," said Alfonso Flores-Lagunes, an economist at Syracuse
University. He said the recent surge in Covid-19 cases could lead
to another round of business closures and job losses, potentially
unwinding a portion of the labor market's summer rebound.
And until a vaccine becomes widely available, Mr. Flores-Lagunes
said, weaker consumer demand will continue to weigh on the
recovery. "Going back to normal in terms of economic activity
really depends on getting the virus under control," he said.
Some businesses are hiring, reflecting that job creation remains
strong, relative to last year's pace, when employers added an
average of 178,000 jobs a month.
"There are a lot of employers that are looking to hire folks,"
said Jennifer Mauro, Goodwill's vice president of employment and
training in southern New Jersey and Philadelphia. She said some
companies have created new positions related to virus safety, such
as cleaning and sanitization, and demand for workers in
transportation has increased with a rise in online shopping.
However, she added some people haven't been able to return to
the workforce because they lack child care, and others are
reluctant to take jobs that pay significantly less than their
The number of job postings increased in October from the
previous month, but they remain about 7.5% below their year-ago
levels, according to job search site ZipRecruiter. There are also
early signs that holiday hiring will be particularly weak this
year, with fewer people making travel plans and shopping at brick
and mortar stores. ZipRecruiter economist Julia Pollak said
holiday-related job postings were down 18.5% in September and
October compared with the same months last year.
It is encouraging that the volume of new jobless applications
continues to decline, she said. "But when you're more than 10
million jobs in the hole, we really would have hoped to see a
swifter return to normal."
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 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 9.3 million workers in the week ended Oct. 17,
according to the Labor Department. That number, which isn't
adjusted for seasonal factors, exceeded the number of people
receiving benefits from state programs, which cover the majority of
A second pandemic program pays 13 additional weeks of benefits
to individuals who have exhausted regular unemployment benefits.
Enrollment in that program moved higher in recent weeks, and
reached nearly 4 million in mid-October. That suggests that some of
the decline in state-benefit recipients represents workers who have
exhausted the maximum amount of payments available through those
Hoang Samuelson, who lost her accounting job at an engineering
company in Portland, Ore., in late March, said she has had a few
interviews in recent months, but the prospective employers she
spoke with seemed reluctant to hire. In one interview, the employer
told her they needed an accountant but couldn't hire because of
uncertainty related to the pandemic.
Ms. Samuelson said her family has cut back on spending and she
is focusing on doing more free activities with her children. Her
husband is employed, and she has been taking care of their
4-year-old and 7-year-old.
Taking a job that requires her to work in another location would
mean finding care for her son and a babysitter to supervise her
daughter's school work, which she is completing remotely, Ms.
Samuelson said. "I'd have to be making a certain amount of money in
order to make it viable," she said.
Write to Kim Mackrael at firstname.lastname@example.org
(END) Dow Jones Newswires
November 05, 2020 10:56 ET (15:56 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.