New jobless claims unexpectedly dipped below 800,000 last week, but still remained historically high as hundreds of thousands of more Americans were put out of work during the ongoing pandemic.
The U.S. Department of Labor released its weekly unemployment insurance claims report at 8:30 a.m. ET Thursday. Here were the main metrics from the report, compared to Bloomberg estimates:
Initial jobless claims, week ended Oct. 17: 787,000 vs. 870,000 expected and a downwardly revised 842,000 during the prior week
Continuing jobless claims, week ended Oct. 10: 8.373 million vs. 9.625 million expected and a downwardly revised 9.397 million during the prior week
At 787,000 new jobless claims came in below 1 million for an eighth straight week, but at a level that still handily topped the pre-pandemic one-week record of 671,000 from 1982.
The improvement came even as California – the most populous state, and one that had previously contributed significantly to increases in new jobless claims – resumed reporting new claims to the national total. Unadjusted claims in California in fact fell by 17,206 during the week ended Oct. 17 to 158,877. While this was still the highest among all states, it marked an improvement from the more than 200,000 claims the state was reporting as recently as last month.
The majority of U.S. states reported declines in unadjusted new claims last week, with Florida, Georgia and New York also reporting significant steps down initial filings. Texas, Massachusetts and Virginia, however, still reported notable increases in new claims.
Meanwhile, continuing claims, which measure the number of individuals still receiving state unemployment insurance benefits, also fell more than expected to below 9 million.
However, the leg lower in continuing claims likely reflects not a rise in re-hiring, but rather an increase in the number of individuals exhausting regular state aid and moving to the Pandemic Emergency Unemployment Compensation program, which provides another 13 weeks of benefits. Unadjusted claims for Pandemic Emergency Unemployment Compensation jumped by 509,823 to about 3.3 million during the week ended Oct. 3, Labor Department data showed on Thursday.
“The recent decline in continuing claims for regular state programs appears to be driven by individuals reaching their 26-week maximum benefit period, which varies by state, and rotating over to the federally funded Pandemic Emergency Unemployment Compensation (PEUC) program,” Nomura economist Lewis Alexander said in a note last week. note. Initial jobless claims first spiked to well over 1 million during the week ended March 20, or about 30 weeks ago.
Since mid-September, “continuing claims in regular state programs have declined 1.6mn NSA [not seasonally adjusted], but only 500k after incorporating individuals on extended benefits. As a result, regular continuing claims overstate the labor market recovery,” he added. “The recent plateauing in initial and total continuing unemployment claims is consistent with our view that the labor market recovery is moderating.”
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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