Jobless claims climb back above 1 million

Initial jobless claims rose in mid-August and topped 1 million again, potentially pointing to an increase in layoffs or a pause in the number of people returning to work after a summer surge in the coronavirus.

New applications for unemployment benefits, a rough gauge of layoffs, climbed to 1.11 million from 971,000 in the prior week, the Labor Department said Thursday.

Economists polled by MarketWatch had forecast 910,000 new claims in the seven days ended Aug. 15. These seasonally adjusted figures reflect applications filed the traditional way through state unemployment offices.

The increase in new claims wasn’t as bad as it seemed, however, based on actual or unadjusted figures. They rose a much smaller 52,776 to 891,510 and remained below 1 million for the third straight week.

MarketWatch is reporting select jobless claims data using actual or unadjusted figures to give a clearer picture of unemployment. The seasonally adjusted estimates typically expected by Wall Street have become less accurate during the pandemic.

New jobless claims are still extremely high, however. They are almost five times higher now than they were before the pandemic struck. Earlier in the year they were running in the low 200,000s and stood near a 50-year bottom.

The number of people receiving traditional jobless benefits through the states, meanwhile, fell by a seasonally adjusted 636,000 to a new pandemic low of 14.84 million in the week ended Aug. 8.
These so-called continuing claims are reported with a one-week lag. The unadjusted total was somewhat lower.

New claims rose to 1.65 million last week if workers eligible under a separate federal program are counted. Some 542,797 freelance writers, self-employed people and gig workers like Uber drivers also applied for benefits last week.

Total claims had hit an all-time high of more than 6.2 million in early April.

Although the federal government is longer adding $600 to a person’s weekly benefits, the law that expanded eligibility for benefits goes to the end of the year.

President Trump has since ordered reduced federal payments of $300 after a divided Congress failed to agree on another bailout package. Not every state is offering the extra federal cash so far.

Altogether, 28.06 million people were still receiving benefits through eight state and federal assistance programs as of Aug. 1, the latest data available. That’s down from unadjusted 28.26 million in the prior week.

The economy sprang back to life in the second quarter after states reopened, but progress in the months ahead is likely to be more uneven. The coronavirus is still rampant even as cases decline and worries are growing about a big spike in the fall.

Many businesses, schools and other organizations, meanwhile, are struggling to figure out how to adapt, adding to a complicated process of getting the economy back up to full speed. A recent survey of consumer sentiment shows Americans think a full recovery will take years.