Weekly Initial Claims for Unemployment Benefits Ease Back After Three Consecutive increases
Initial claims for regular state unemployment insurance fell to 326,000 for the week ending October 2, a drop of 38,000 from the previous week’s tally of 364,000 (see first chart). The latest report breaks a string of three consecutive increases that pushed claims to the highest level since August 7.
Despite the drop in the latest week, the four-week average rose for a second consecutive week, rising 3,500 to 344,000, the highest level since August 28. The recent surge in new Covid cases continues to be a setback for some parts of the economy.
The number of ongoing claims for state unemployment programs totaled 2.464 million for the week ending September 18, a drop of 37,260 from the prior week and the fourth decline in the last six weeks (see second chart).
Continuing claims in all federal programs totaled 1.709 million for the week ending September 18, a drop of 817,378 as two Federal emergency programs, Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation, again accounted for most of the drop (see second chart).
The latest results for the combined Federal and state programs put the total number of people claiming benefits in all unemployment programs, including all emergency programs, at 4.173 million for the week ended September 18, a fall of 854,638 from the prior week (see second chart).
The labor market remains tight with the number of open jobs hitting a new record high in July. However, the recent surge in new Covid cases creates uncertainty and likely resulted in some additional layoffs despite the tight market. Businesses and consumers are adapting to the new Covid world, but the waves of new cases will continue to disrupt activity and create uncertainty for the economic outlook.
Robert Hughes
Robert Hughes joined AIER in 2013 following more than 25 years in economic and financial markets research on Wall Street. Bob was formerly the head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals. Prior to BBH, Bob was a Senior Equity Strategist for State Street Global Markets, Senior Economic Strategist with Prudential Equity Group and Senior Economist and Financial Markets Analyst for Citicorp Investment Services. Bob has a MA in economics from Fordham University and a BS in business from Lehigh University.
