New Jobless Claims Show Biggest Drop in Four Weeks
The Department of Labor reported that 837,000 initial claims for unemployment insurance were filed for the week ending September 26, resulting in the biggest decrease since August 29. That’s a 36,000 drop from last week’s adjusted total of 870,000 initial claims. Still, weekly initial claims have been oscillating in the mid-to-upper-800,000 range the past several weeks and signals the pace of the recovery is slowing. Continued claims for the week ending September 19 were 11.8 million, down 980,000 from the previous week’s total. LaborIQ® by ThinkWhy estimates the combined total of initial and continued claims is approximately 12.3 million for the week ending September 26.
The economic impact of COVID-19 has been lopsided across industries, locations and demographics. Overall, LaborIQ by ThinkWhy estimates the unemployment rate to be 13.8% using Unemployment Insurance Claims, but some industries are already above last year’s employment level in certain cities. Congressional fiscal stimulus remains a critical lifeline to the economy. The employment level is expected to be halfway back, but overall economic activity remains lower than pre-pandemic levels. Nonfarm payrolls, to be released Friday, will reveal whether we have made it back to this point. But the expectation is that September’s growth will not be at levels of recent months.
Initial unemployment insurance claims have been hovering between 800,000 and 900,000 per week, reflecting a slowly recovering economy. Local economies feel the squeeze as the virus continues to restrict business activity, inhibiting the rebound as millions remain out of work. LaborIQ by ThinkWhy expects initial jobless claims for October to be around 3.8 million. House leaders and Treasury Secretary Steven Mnuchin are discussing an additional relief package to be enacted in the coming month, prior to the election. Businesses are hopeful for more fiscal stimulus soon to save jobs and put the economy on a faster track to recovery, and many continue to monitor the availability of a vaccine for COVID-19. The road ahead is uncertain, but stimulus negotiations are at least a step in the right direction.
An important note: This week’s report does not include new claims from California as the state temporarily suspended accepting new claims. Last week’s total for California was used as an estimate in this week’s report.
LaborIQ by ThinkWhy continuously monitors and forecasts labor data at all levels, measuring impact to cities, industries, occupations and business across the U.S.