Little Movement in Unemployment Claims for 2nd Straight Week
Initial claims for unemployment insurance fell just slightly for the second straight week, suggesting recovery from the coronavirus-induced economic slowdown will remain slow and gradual.
The Labor Department yesterday reported seasonally adjusted initial claims fell to 837,000 for the week ending Sept 26, a decrease of 36,000 from the previous week’s revised level. The four-week moving average fell to 867,250, a decrease of 11,750 from the previous week’s revised average.
The report said the advance seasonally adjusted insured unemployment rate fell to 8.1 percent for the week ending September 19, a decrease of 0.6 percentage point from the previous week’s revised rate. The advance number for seasonally adjusted insured unemployment during the week ending September 19—also known as continuing claims—fell to 11,767,000, a decrease of 980,000 from the previous week’s revised level. The four-week moving average fell to 12,701,250, a decrease of 381,250 from the previous week’s revised average.
Sarah House, Senior Economist with Wells Fargo Securities, Charlotte, N.C., said the trend from the past two weeks signals the “snail’s pace” of the jobs recovery.
“With the trend inching down only gradually and a drove of layoff announcements in recent days even as the economy has ‘re-opened,’ the recovery remains precarious,” House said. “The labor market’s recovery remains painfully slow.”
House noted among all programs, 26.5 million workers continue to collect benefits. “As the pandemic drags on, furloughs have turned to layoffs,” she said. “Furloughs keep workers more closely tied to the labor market, making it easier to return to employment when business conditions improve. Layoffs, in contrast, put more distance between workers and employers, often severing ties completely, and will extend the time it takes for the labor market to recover.”
House added an “onslaught” of layoff announcements among household-name companies in recent days “highlight that the despite the torrid pace of economic growth in recent months, activity still remains well below pre-pandemic levels for most industries. With no end in sight to the pandemic, businesses are adjusting their staffing needs. But that threatens the recovery’s gains made to date, especially with fading fiscal support to both the unemployed and businesses.”
The Bureau of Labor Statistics releases its September Unemployment report this morning at 8:30 a.m. ET. MBA NewsLink will provide commentary and analysis from MBA Chief Economist Mike Fratantoni.