The number of Americans filing new claims for unemployment benefits ticked up slightly last week, reinforcing views that the labor market recovery is struggling to build momentum amid the pandemic.
Initial claims for state unemployment benefits totaled a seasonally adjusted 870,000 for the week ended Sept. 19, compared to 866,000 in the prior week, the Labor Department said in a release Thursday (pdf). Economists polled by Reuters predicted 840,000 applications for benefits in the latest week.
Claims have dropped substantially after hitting a record peak of 6.867 million at the end of March, but now remain stuck at elevated levels, above their Great Recession peak of 665,000 weekly filings.
Job cuts have spread to industries such as financial services and technology that were not initially impacted by the mandated business closures in mid-March because of a drop in demand.
Federal Reserve chairman Jerome Powell, in congressional testimony on the impact of the CCP (Chinese Communist Party) virus on Wednesday, said that while the labor market has made a significant recovery, the outlook remains “highly uncertain.”
“In the labor market, roughly half of the 22 million payroll jobs lost in March and April have been regained as people returned to work. Both employment and economic activity, however, remain below their pre-pandemic levels and the path ahead continues to be highly uncertain,” he said.
The number of people continuing to receive unemployment benefits after earlier filing an initial claim fell by 167,000 to 12.6 million, the Labor Department said, while the total number of people claiming benefits in all programs nationwide for the week ending Sept. 5 dropped by 3.7 million to just over 26 million.
The steady decline in continuing claims over the past several months likely reflects that some of those who lost their jobs amid initial CCP virus lockdowns are being rehired as the country reopens. Another factor driving that number down could be that regular jobless aid, which lasts 6 months in most states, has run out.
Also, the Trump administration’s Lost Wages Assistance program, which offered $300 a week for up to 6 weeks after the $600 boost to jobless benefits lapsed in July, is running out in a number of states. At least seven states—including Arizona, Massachusetts, Missouri, Montana, New Hampshire, North Carolina, and Texas—have ended payments for the weekly unemployment supplement, according to a Lost Wages Assistance tracker, with others soon to follow.
Powell told lawmakers on Wednesday that Congress and the Fed need to “stay with it” in working to support the economy’s recovery. Besides slashing interest rates to near zero and vowing to keep borrowing costs low for a while, the Fed has also been pumping money into the economy.
Other reports have shown that retail sales and production at factories moderated in August, while business activity cooled in September. The housing market, which has so far been a bright spot in the economy, also showed some cooling. New residential construction figures from the Census Bureau (pdf) showed that residential building permits, a leading economic indicator, dropped by 0.9 percent from July to August. Privately-owned housing starts fell by 5.1 percent month-over-month.
Reuters contributed to this report.
From The Epoch Times
