Skip to main content

Sale signs hang in the windows of a Lord & Taylor store in Boston on Aug. 5, 2020.

BRIAN SNYDER/Reuters

The number of Americans filing new claims for jobless benefits inched down last week, signalling the U.S. labour market is making little fresh headway in getting millions of people back on the job after being out of work owing to COVID-19 disruptions.

Initial claims for state unemployment benefits totalled a seasonally adjusted 840,000 for the week ended Oct. 3, compared with an upwardly revised 849,000 in the prior week, the Labour Department said on Thursday. Economists polled by Reuters had forecast 820,000 applications in the latest week.

While last week’s level of new claims was the lowest since March, they have stalled at historically high levels after dropping below one million in August as the government changed the way it strips seasonal fluctuations from the data. They are above their 665,000 peak during the 2007-09 Great Recession, though filings have dropped from a record 6.867 million at the end of March.

Story continues below advertisement

The data on new claims for the past two weeks have been distorted by California taking a two-week hiatus in reporting its numbers because of problems with a backlog of filings and indications of fraud.

“With California pausing initial claims for two weeks, the change in initial claims ... is a hollow metric,” AnnElizabeth Konkel, economist at Indeed Hiring Lab, said in a note. “Headline number aside, the report points to a wounded economy that’s not in good shape for winter.”

The number of people continuing to draw benefits after their initial claim for assistance fell to 10.976 million in the week ended Sept. 26 from 11.979 million the week before. Economists polled by Reuters had forecast continuing claims at 11.4 million.

A wider measure of those drawing assistance under measures enacted by Congress earlier this year showed 25.5 million people receiving benefits in the week ended Sept. 19, a decrease of about 1 million.

On Wall Street, stocks were higher for a second day as investors clung to the hope that the elevated claims data might be a catalyst for a new round of federal pandemic relief. The S&P 500 was up 0.5 per cent at a one-month high.

Labour-market gains from the reopening of businesses are fading. Last Friday’s employment report for September – the last one before the Nov. 3 presidential election – showed the fewest number of jobs created since the labour market began recovering in May. Roughly half of the 22.2 million people who lost their jobs in the early days of the pandemic remain out of work.

Economists are predicting a further slowdown in hiring through the rest of 2020 and into 2021, especially without another federal pandemic assistance package.

Story continues below advertisement

U.S. President Donald Trump on Thursday said talks with Congress had restarted on targeted fiscal relief. Earlier this week, Mr. Trump cut off negotiations with Democrats on new aid, shortly after being released from Walter Reed Medical Center, where he had been treated for COVID-19.

Meanwhile, progress containing the coronavirus remains elusive, with cases rising across much of the country and a surge expected in the fall, which could lead to the reimposition of restrictions on businesses in the hard-hit services sector.

“Putting a damper on forecasts for broad, near-term economic improvement are the rising numbers of COVID-19 cases in the U.S. and the dim prospects for further substantial federal relief legislation,” Bankrate.com senior economic analyst Mark Hamrick said in a note. “Many Americans are still facing the prospect of layoffs, and businesses of all sizes are facing the threat of failure, reduced sales and or capacity.”

Our Morning Update and Evening Update newsletters are written by Globe editors, giving you a concise summary of the day’s most important headlines. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies