The Department of Labor reported that 840,000 initial claims for unemployment insurance were filed for the week ending October 3. That is a drop of 9,000 from last week’s adjusted total of 849,000 initial claims. Continued claims for the week ending September 26 were just under 11.0 million, down 1.0 million from the previous week. Continued claims totals lag initial claims by one week. LaborIQ® by ThinkWhy estimates the combined total of initial and continued claims for the week ending October 3 is approximately 11.3 million.
LaborIQ estimates the unemployment rate to be 13.3% using Unemployment Insurance Claims. Nationally, 51% of the jobs lost during the pandemic have been recovered, but the next 49% will likely be recouped at a slower pace. While the labor market has made progress, the pandemic’s negative effect on the economy continues.
Many experts believe that without further fiscal stimulus, economic recovery will take significantly longer. We do not have to look far for evidence. Even as local economies reopened, permanent layoffs increased in August and September. Major airlines have announced payroll reductions and cut routes based on waning demand. Absent additional stimulus, families may not be able to pay their monthly bills or contribute to more retail and restaurant spending. Two-thirds of America’s economy is driven by consumer spending.
Even so, prospects for additional fiscal stimulus were mixed this week on Capitol Hill. President Trump first said he was calling off negotiations over a trillion-dollar stimulus package until after the election, then signaled he was open to more targeted measures. The likeliest would include piecemeal funding for the ailing airlines, more loans for small businesses and additional stimulus checks for taxpayers.
Initial unemployment insurance claims hovered between 800,000 and 900,000 per week in September. LaborIQ expects initial jobless claims for October to be around 3.8 million, an average of 850,000 per week. COVID-19 will continue to inhibit business activity until the spread is under control. The widespread availability of a vaccine for the virus will remain an important focus of both public health officials and economists in the coming months. The road ahead is full of challenges and risks, but the success of the off-again, on-again stimulus negotiations remains a key to fueling a much-needed recovery.
An important note: This week’s report does not include new claims from California as the state suspended accepting new claims for two weeks. California’s estimates reflect levels reported prior to the pause.
LaborIQ by ThinkWhy continuously monitors and forecasts labor data at all levels, measuring impact to cities, industries, occupations and business across the U.S.