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The U.S. economy still has a long way to go to recover all the jobs lost during the pandemic.
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The numbers: The number of Americans who lost their jobs and applied for unemployment benefits in mid-October slid by 55,000 to a new pandemic low of 787,000, but the decline stemmed in part from fewer new claims in California after a temporary applications freeze.
Initial jobless claims filed through state programs fell below the 800,000 mark for the first time since the coronvirus epidemic began in March, the Labor Department reported Thursday. Economists polled by MarketWatch had forecast new claims to fall to 860,000 in the week ended Oct. 17.
New claims in the prior week were also revised down to 842,000 from 898,000 in an unusually large revision.
What makes the latest report harder to decipher was the inclusion again of new jobless claims from California after two-week pause. The state stopped accepting applications temporarily to work down a large backload, update its computer systems, and install new fraud-detection measures.
The updated figures from California contributed heavily to the large downward revision two weeks ago.
What happened: California said new jobless claims totaled an unadjusted 158,877 in the past week, down from 176,083 two weeks ago.
The state’s numbers had been frozen at 226,179 in the U.S. Labor Department’s national summary while it worked to improve its unemployment-compensation system.
California typically accounts for almost 20% of all new jobless claims in the country, but it’s run closer to 30% during the coronavirus pandemic.
Continuing jobless claims filed through state programs, meanwhile, sank by 1.02 million to a seasonally adjusted 8.37 million in the week ended Oct 10. That’s yet another pandemic low.
The decline isn’t as good as it looks, though. A large number of people no longer getting paid state benefits have been shifted into a federal program that offers extended compensation. Federal continuing claims have almost tripled since August to 3.3 million.
Altogether, the number of people receiving benefits from eight separate state and federal programs fell by 1.05 million to unadjusted 23.2 million as of Oct. 3, the latest data available.
Some economists question the accuracy of the estimate since other government data indicates unemployment is significantly lower.
Big picture: The number of people applying for benefits each week had been stuck until last week in the 800,000s for two months, suggesting that either more layoffs are taking place, the rate of hiring has slowed or both.
If that’s the case, the speed of the economic recovery is bound to slow after summer surge, especially if the recent upturn in coronavirus cases gets worse.
Many economists say another big government stimulus is needed to help the U.S. avoid further slippage, but Washington is hardly any closer to a deal than it was three months ago when most major federal benefits expired.
Read:Stimulus stalemate threatens more hardship and slower recovery, economists warn
And:‘I’m terrified, frankly’: These people are depending on another stimulus to stay afloat
Market reaction: The Dow Jones Industrial Average DJIA, +0.17% and S&P 500 SPX, +0.22% were set to open lower in Thursday trades
