Weekly Unemployment Claims Drop Significantly
The Department of Labor reported that 787,000 initial claims for unemployment insurance were filed for the week ending October 17, finally dipping below the 800,000 barrier. The October 17 figure is a decrease of 55,000 from the previous week’s adjusted total of 842,000 initial claims. The previous week’s initial claims total was revised down by 56,000, making for a substantial drop of 111,000 between the last two reports. Continued claims for the week ending October 10 dropped to 8.4 million. That is a decrease of 1.0 million on top of the previous week’s continued claims number being revised down by 621,000. It was the first time the reported continued claims number was under 10 million, which is significant given the number reached 24.9 million in May.
One of the reasons for the downward revisions was the resumption of California’s reporting for unemployment insurance claims. Initial unemployment claims were not counted for California beginning on September 19, and an estimate had been used in the past few reports. Fortunately, the actual numbers were lower than what had been estimated, which partially contributed to the U.S. revisions for this week.
LaborIQ® by ThinkWhy estimates the combined total of initial and continued claims for the week ending October 17 is approximately 8.4 million, with an unemployment rate of 12.4% due to the pandemic’s prolonged economic impact.
The drops in the weekly claims totals along with the significant revisions from the prior week are positive signs that the recovery continues to gain some traction. LaborIQ expects initial jobless claims for October to be around 3.6 million, an average of 815,000 per week. COVID-19 will continue to inhibit business activity until the virus is under control. Stimulus negotiations remain a critical need for many small businesses, and the progress of vaccine development will remain an important focus of both public health officials and economists for the foreseeable future. Even after a vaccine is developed, its distribution and efficacy could take some time. The road to recovery remains tough for businesses and families to navigate, but stimulus negotiations remain key to regaining some momentum.
LaborIQ by ThinkWhy continuously monitors and forecasts labor data at all levels, measuring impact to cities, industries, occupations and business across the U.S.