The number of Americans who applied for jobless benefits in early October shot up to the highest level in seven weeks and pointed to an erosion in the U.S. labor market, though ongoing strains in California’s unemployment system has made it harder to know for sure.
Initial jobless claims filed through state programs jumped by 53,000 to 898,000 in the week ended Oct. 10 from a revised 845,000 in the prior week, the Labor Department said Thursday. Economists polled by MarketWatch had forecast new claims to fall to 825,000.
An unadjusted 372,891 people also filed new claims under the Pandemic Unemployment Assistance Act, the federal law that temporarily made self-employed workers eligible for benefits for the first time.
That put the number of actual or unadjusted new claims at an estimated at 1.26 million, a touch lower than in the prior week.
There’s a big caveat, however.
The actual or unadjusted number of new claims in California was frozen at 226,179 for the third week in a row. The state stopped updating its figures three weeks ago after launching an effort to whittle down a large backlog, eradicate duplicate claims and weed out fraud.
The state began accepting new jobless applications last week after a two-week pause, but it still isn’t reporting its totals to the U.S. Labor Department. California typically accounts for almost 20% of all new jobless claims in the country, but it’s run closer to 30% during the coronavirus pandemic.
Stripping out California’s estimate, the number of unadjusted jobless claims in the other 49 states rose by 76,670.
New jobless claims rose the most in the states of Indiana, Illinois and Massachusetts, states where coronavirus cases have increased again. They declined the most in Michigan.
Continuing jobless claims filed through state programs, meanwhile, fell by 1.17 million to a seasonally adjusted 10 million in the week ended Oct 3. That’s also the lowest level since the onset of the pandemic, but it’s unclear if the decline last week reflected more people going back to work or if their unemployment benefits expired.
Altogether, the number of people reportedly getting benefits through eight state and federal programs declined by 215,270 to an unadjusted 25.29 million as of Sept. 26, the latest data available. Some economists question the accuracy of the estimate given that other government data shows the pool of unemployed is about half that size.
New applications for unemployment benefits have tumbled from a pandemic peak of 6.9 million in late March, but the rate of decline has slowed sharply in a potentially troubling sign.
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