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Companies are still adding new jobs or rehiring laid-off workers, but unemployment is still very high and millions of Americans are receiving jobless benefits.
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The numbers: New applications for unemployment benefits fell slightly in late October, but they are only declining very slowly and signal ongoing stress in the U.S. labor market.
Initial jobless claims filed through state programs fell by 7,000 to 751,000 in the seven days ended Oct. 31, the government said Thursday. Economists polled by MarketWatch had forecast a bigger decline to 728,000.
New claims had also totaled 751,000 in the prior week, but they were revised up to 758,000. So basically there was no change.
Another 362,883 people applied for benefits through a temporary federal-relief program that expires at the end of the year.
What happened: New claims have gradually declined over the past few months, but not nearly as rapidly as they did during the summer.
The number of people already collecting state-provided benefits, known as continuing claims, dropped by 538,000 to a seasonally adjusted 7.29 million in the week ended Oct 24. That’s a fresh pandemic low.
At the same time, though, a rising number of people who’ve exhausted state benefits have shifted into a federal program that offers extended compensation.
Federal continuing claims climbed by 277,564 to 3.96 million in the week ended Oct. 17 . The number of people receiving these benefits has tripled since August.
Altogether, the number of people receiving benefits from eight separate state and federal programs declined by 1.15 million to unadjusted 21.5 million as of Oct. 17, the latest data available.
Some economists question the accuracy of the estimate since other government data indicates unemployment is significantly lower.
The big picture: Even after falling to a pandemic low, jobless claims are extremely high by historical standards and point to ongoing strains in the U.S. labor market that are likely to retard the economic recovery. New claims are more than three times higher than the precrisis average.
Further gains in employment, what’s more, could be constrained by a record outbreak of coronavirus cases. Some sectors such as entertainment and hospitality have said they’ll eliminate more jobs because business is unlikely to return to normal anytime soon.
On Friday, the government is expected to report a 530,000 increase in new jobs in October, according to economists polled by MarketWatch. It would be the smallest gain since the economy reopened last May.
Market reaction: The Dow Jones Industrial Average DJIA, +1.33% and S&P 500 SPX, +2.20% were set to open higher in Thursday trades. Stocks have risen this week after a close election that’s likely to result in divided government.
