By Sarah Chaney Cambon
Jobless claims rose for the second straight week, to 778,000, a
sign the nationwide surge in virus cases was starting to weigh on
the labor-market recovery.
Claims haven't risen for two consecutive weeks since July.
Worker filings for unemployment insurance are down sharply from a
peak of nearly seven million in late March. But they remain higher
than in any previous recession -- the pre-pandemic peak was 695,000
in 1982 -- for records tracing back to 1967.
Unemployment filings can be more volatile around the holidays,
due to workweek changes that can cause seasonal-adjustment
anomalies. The four-week moving average, which smooths out weekly
variation, increased by 5,000 to 748,500, the Labor Department said
Increases in jobless claims were widespread across states. Some
of the states with sharp increases in virus cases, including
Minnesota, Ohio and Illinois, saw a large rise in claims last
Other data released Wednesday showed the broader economic
recovery continued in recent months. Orders of durable, or
long-lasting goods, rose 1.3% in October. The Commerce Department
said that its second reading of gross domestic product growth in
the third quarter was unchanged from the initial estimate, at a
33.1% annual rate, or 7.4% over the prior quarter, while U.S.
company earnings picked up strongly. The agency releases another
report on spending and incomes later Wednesday morning.
A nationwide surge in Covid-19 cases threatens to weigh on the
economic recovery, as many states and localities impose new
restrictions on businesses, though less stringent than the ones
introduced in the spring, economists say. Further, the spread of
the virus, combined with the onset of winter, is likely to send
more consumers indoors and hamper spending and employment in
industries like restaurants.
"Covid is driving the bus on the economy, and we're going to
have some hairpin turns until we get to the nice, straight open
road of the postvaccine world," said Constance Hunter, chief
economist at KPMG LLP.
The U.S. economy continues to recover, albeit more slowly than
when many businesses first reopened from lockdowns in late spring
and early summer. Growth in retail sales and employment has cooled
in recent months, government data show. Consumers' views toward the
economic outlook soured at the beginning of November, according to
the Conference Board, a private research group.
Still, the labor market has rebounded faster than many
economists projected. The unemployment rate, at 6.9%, is down from
April's post-World War II high of 14.7%. But recent real-time
private-sector data point to a slowing job market. Growth in job
postings has slowed across the U.S., according to job site
ZipRecruiter. Small-business shutdowns and layoffs have increased
in recent weeks, according to researchers at the University of
Chicago, University of Illinois and University of California,
Berkeley. They analyzed data for 40,000 small businesses that use
Homebase, a scheduling-software company.
The number of people collecting unemployment benefits through
regular state programs, which cover most workers, fell to 6.1
million for the week ended Nov. 14 from 6.4 million a week earlier,
on a seasonally adjusted basis, according to the Labor Department.
Continuing claims declined throughout the summer and into the fall,
a sign many laid-off Americans returned to work.
However, some of the recent declines in continuing claims
represent individuals who have exhausted the maximum duration of
payments available through regular state programs, and are now
collecting money through a federal program that provides an extra
13 weeks of benefits. About 4.5 million people were receiving aid
through this extended-benefits program in the week ended Nov. 7 --
the largest number since the program began this spring, Labor
Department data showed.
Both the extended-benefits program and a program that provides
benefits to those not typically eligible for jobless aid -- such as
independent contractors and self-employed individuals -- will
expire at the end of this year.
Jason Rossman, 41 years old, of Watertown, Mass., has been
collecting unemployment benefits since he was furloughed this
spring from his project-management job in the trade-show industry.
He said jobless benefits, particularly the extra $600 a week that
ended this summer, have helped cushion his finances. Meanwhile, he
is only spending money on essentials like food and utilities and
has stopped dining out at restaurants.
Though he isn't in dire financial straits, Mr. Rossman said he
hopes to have a job by the time the federal extended-benefits
program ends in December. He has been applying to
project-management roles since his temporary layoff became
permanent in early October. But he hasn't landed one job interview
yet and feels his background in the hard-hit events industry is
limiting his career prospects right now.
"I'm very pessimistic that I'm going to actually find anything
anytime soon," Mr. Rossman said. He hopes that as vaccines start to
become widely distributed and travel picks up, the trade-show
industry will bounce back so he can return to his former job.
Harriet Torry and Jeffrey Sparshott contributed to this
Write to Sarah Chaney Cambon at email@example.com
(END) Dow Jones Newswires
November 25, 2020 09:59 ET (14:59 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.