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article imageU.S. new jobless claims hit highest level since mid-August

By Karen Graham     Oct 15, 2020 in Business
The number of Americans seeking unemployment benefits rose last week by the most in two months, to 898,000, a historically high number and evidence that layoffs remain a hindrance to the economy’s recovery from the pandemic recession.
The total was for the week ending October 10, and represents a gain of 53,000 from the previous week’s upwardly revised total of 845,000, and continues to remain above the pre-pandemic high point of 695,000, according to CNBC News.
At the same time, the Labor Department said the number of people who are continuing to receive benefits dropped 1.2 million to 10 million. This drop could mean that many of the unemployed have returned to the job market, but the Associated Press notes that this could also mean more people have used up their regular state benefits that last about six months - and have moved on to extended benefit programs that last an additional three months.
It is fair to say that jobless claims have been steadily declining after reaching a high of close to 7 million in March, reports the Wall Street Journal, however, claims have been slowly increasing for the past six weeks - a sure sign that the economy is struggling as employers still aren’t confident enough in their businesses or in their view of the economy to ramp up hiring.
“Further recovery looks to have stalled out,” said AnnElizabeth Konkel, an economist at Indeed. “Holiday hiring is sluggish, and many businesses need to make significant changes to ride out the colder months.”
A report Thursday from Moody’s Analytics, a forecasting firm, and Morning Consult, a polling outfit, found that millions of people remain dependent on government aid. Worse yet, nearly 12 million households are unsure they can make timely mortgage payments.
"Although the absolute level of claims remains well above the pre-pandemic level, the declining trend of continuing claims is more important to watch,” Citigroup economist Andrew Hollenhorst said in a note. “The decline in claims over the past few weeks, even after netting out those who transferred to federal PEUC, is encouraging, pointing to still-robust rehiring in late September, and should continue into Q4.”
More about Jobless claims, Labor department, Firsttime filings, 79 unemployment rate, Business
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