Roundup: U.S. weekly jobless claims fall slightly to 840,000 amid slowing recovery

  • World
  • Friday, 09 Oct 2020

WASHINGTON, Oct. 8 (Xinhua) -- The number of initial jobless claims in the United States fell slightly to 840,000 last week, indicating a slowing recovery in the pandemic-ravaged labor market, the Labor Department reported on Thursday.

In the week ending Oct. 3, the number of Americans filing for unemployment benefits dropped by 9,000 from the previous week's upwardly revised level of 849,000, according to the department's Bureau of Labor Statistics (BLS).

It marked the seventh time in the past 29 weeks that the number came in below 1 million.

"For more than six months we have had more than 800K people filing jobless claims every week. To put this in perspective, recall that even at the height of the 2007-09 financial crisis, jobless claims peaked at just 665K," Tim Quinlan, senior economist at Wells Fargo Securities, wrote in an analysis.

The four-week moving average, a method to iron out data volatility, decreased by 13,250 to 857,000, according to the BLS report.

The number of people continuing to collect regular state unemployment benefits in the week ending Sept. 26 decreased by 1 million to 10.98 million, the report showed.

The total number of people claiming benefits in all programs -- state and federal combined -- for the week ending Sept. 19 also declined by 1 million to 25.5 million.

U.S. employers added 661,000 jobs in September, the smallest hiring gains since the labor market started to recover in May, the BLS reported last week. The unemployment rate fell by 0.5 percentage point to 7.9 percent.

Roughly 22 million people were laid off in March and April amid COVID-19 shutdowns, pushing up the unemployment rate to double digits. Even with the September data, payrolls are more than 10 million below pre-pandemic levels.

The U.S. unemployment rate is likely to end the year at 7.3 percent, down from a peak of nearly 15 percent in April but still double its pre-pandemic level, according to Peterson Institute for International Economics (PIIE).

In its semiannual global economic forecast released Thursday, the Washington-based think tank projected that the U.S. economy is on track to shrink 3.8 percent in 2020.

"The early stages of the U.S. recovery showed a sharp partial rebound in aggregate demand, supported by low interest rates, fiscal stimulus, and pent-up demand," said Karen Dynan, nonresident senior fellow at PIIE and a Harvard professor, who led the forecast.

The pace of recovery has slowed in recent months more than in some other major economies, and "remains vulnerable to setbacks, particularly in the absence of further fiscal support," Dynan said.

The extra 600-dollar per week federal unemployment benefits, as well as federal moratorium on evictions, expired at the end of July. Two months later, Congress and the White House remain deadlocked on the next round of coronavirus relief.

U.S. Federal Reserve Chairman Jerome Powell warned on Tuesday that a prolonged slowing recovery from the pandemic could trigger typical recessionary dynamics, which could continue to exacerbate existing disparities in the economy.

Compared with May and June, the economy's recovery from the COVID-19 induced recession has slowed in recent months as the effects of fiscal stimulus fade, Powell noted.

"Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses," said the Fed chief, adding that the risks of overdoing it for now seem to be smaller.

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