By Robert Hughes
Initial claims for regular state unemployment insurance totaled 751,000 for the week ending October 24, down 40,000 from the previous week’s revised tally of 791,000 (see first chart). Claims have posted a second consecutive week below 800,000 though the level is still high by historical comparison. The four-week average was 787,750, down 24,500 from the prior average. The latest week is the 32nd week of historically massive claims. Prior to the lockdowns, initial claims were running around 230,000 (see first chart). Persistent initial claims at such a historically high level remain a troubling sign for the labor market recovery and the economy.
The number of ongoing claims for state unemployment programs totaled 8.031 million for the week ending October 10, down 921,277 from the prior week (see second chart). For the same week in 2019, ongoing claims were 1.384 million. Continuing claims from state programs have trended lower since the peak in early March. Over the same period, continuing claims in all federal programs have trended higher, reaching 14.623 million for the week ending October 10.
The total number of people claiming benefits in all unemployment programs including all emergency programs was 22.654 million for the week ended October 10, down 415,727 from the prior week. While there has been improvement from the catastrophic results in March and April, the current levels of weekly initial claims and continuing claims in all programs are still very high (see second chart).
Government-imposed restrictions intended to slow the spread of Covid-19 continue to wreak havoc on the economy and the labor market. A resurgence of new Covid-19 cases is raising the possibility of renewed restrictions. The longer consumers remain restricted and businesses remain closed or limited, the more uncertain a labor market recovery becomes and the higher the probability of a slow and drawn-out economic recovery.
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.