The number of new applications for unemployment benefits hit 840,000 last week, the Labor Department reported on Thursday, as the number of claims has barely budged for the past six weeks and signals that the pandemic continues to batter the job market. The prior week’s claims were originally 837,000 but revised up to 849,000 in Thursday’s report.
Forecasters projected roughly 820,000 new claims.
In addition to claims for regular benefits, more than 460,000 workers filed new claims for the Pandemic Unemployment Assistance program, which provides for unemployment insurance for people sidelined by the epidemic who normally wouldn’t be eligible for regular benefits, such as gig workers whose business dried up. Combining the claims, over roughly 1.3 million jobless workers filed for relief last week.
“We seem stuck on this plateau, which further ensures the overall unemployment rate will fall only slowly from here,” said Robert Frick, a corporate economist at Navy Federal Credit Union.
The Labor Department reports that roughly 11 million jobless workers are eligible for Pandemic Unemployment Assistance, including for continuing claims, but economists say that number could be off by millions, as backlogs in applications has prompted jobless workers to reapply for the benefit, which artificially increases the number of recipients.
The total number of people claiming benefits from all jobless programs for the week ending Sept. 19 was over 25 million. For comparison, there were slightly over 1.4 million claims in the comparable week in 2019. Unemployment is particularly high in Hawaii, California, and Nevada.
Still, the economy is nearly seven months into the pandemic, and jobless claims remain at historically high levels. In January, before the coronavirus hit the United States, weekly claims were just over 200,000. Since late September, claims have hovered just under 900,000, which is an improvement from prior weeks.
Jobless claims fell below the psychologically important 1 million mark at the end of August. Before then, as the coronavirus forced economic disruption to slow its spread, layoffs and thus weekly claims for unemployment benefits skyrocketed in late March to as high as 6.9 million.
The number of beneficiaries then dropped precipitously through the end of May as many workers returned to the job, but that decline stalled at the end of summer.
As claims remain historically high, Washington has been incapable of agreeing on providing additional relief to jobless workers and businesses struggling to stay open.
President Trump announced Tuesday that he has halted negotiations with Democrats for a new round of federal coronavirus aid, tweeting that Speaker Nancy Pelosi “is not negotiating in good faith” and is seeking too much money.
Later on Tuesday, Trump reversed his position in a tweet, saying that he would support relief for the airlines and small businesses.
Pelosi, a Democrat from California, and Treasury Secretary Steven Mnuchin are the lead negotiators in the relief talks. Talks between the two halted momentarily after Trump’s initial tweet that called off the negotiation. Those talks continued after the president switched positions.
Still, it remains unlikely that Washington will advance a relief package possibly containing a new round of stimulus checks or enhanced unemployment benefits before the election, as negotiators can’t agree on how much the relief should cost.
Democrats support a package costing $2.4 trillion while Republicans back a plan with a price tag that is no more than $1.6 trillion. While the two sides can’t agree, workers continue to lose their jobs.
“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,” said Mark Hamrick, a senior economic analyst at Bankrate.com.
In other news, California last week announced a pause in its processing of jobless claims in an effort to buy time to reduce its claims processing backlog and implement fraud prevention technology.
That pause has been lifted, as jobless workers in that state were able to file for unemployment benefits beginning on Monday.
Nearly 1.6 million out-of-work Californians have been waiting to sign up for benefits since Sept. 30.
