Jobless Claims Unexpectedly Rise to 898,000

Daniel Fowler
October 17, 2020

However last week, new jobless claims in America rose to 898,000, according to Thursday's Labor Department report that shows a slowing in hiring in an economy that still has roughly 10.7 million people who are unemployed. The initial claims for the acquisition of state unemployment benefits has already increased from 53,000 to 898,000 at the end of October 10. "Overall, the signal from the claims data is still one of extremely weak conditions in the labor market".

While 1.68 million people have sought unemployment benefits in New Jersey, 1.44 million have been deemed eligible. Persistent initial claims at such a historically high level remain a very troubling sign for the labor market recovery and the economy.

Like in the prior two reports, California's initial claims number remained frozen at the mid-September level despite the ending of its two-week pause in accepting new claims. Until a month ago, each subsequent week had seen claims decline.

The broadest measure of unemployment insurance - which includes those actually being paid under the regular state UI, the Federal Pandemic Unemployment Assistance, the state Extended Benefits and the federal Pandemic Emergency Unemployment Compensation (PEUC) - fell by 215,000 for the week ending September 26.

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The 4-week moving average, which may be a more reliable measure of the health of the jobs market because it smoothes out week-to-week volatility, rose to 866,250, which is 8,000 above the previous week's revised average. About 25 million people are now receiving some kind of jobless aid (although experts say that number is nearly certainly inflated to some degree by problems with the data, including double-counting and fraud).

Nationwide, on average, unemployment benefits replace about 33 percent of what recipients earned at their previous job.

The bitter disagreements between the sides have allowed crucial programs, including additional weekly benefits to the unemployed, to expire in July.

Workers here have received $16.5 billion in state and federal unemployment benefits since the middle of March. Another possibility is that some newly unemployed people are refiling for benefits, after they briefly returned to work only to lose their job again, he said.

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