The world’s largest economy is struggling to cope with problems created by the coronavirus pandemic. Unfortunately, many people from New York to Los Angeles lost their jobs. Moreover, it won’t be easy to replace so many jobs lost in 2020. Hopefully, new filings for jobless claims in the U.S. totaled 787,000 last week. Interestingly, this result is nearly the lowest since the early days of the coronavirus pandemic.
It is worth noting that, initial jobless claims failed to meet expectations. In this case, there no need to worry about this fact, as analysts expected that jobless claims would reach 875,000 for the week that ended on October 17. Moreover, it was their lowest total since October 3 as well as their second-lowest mark since March 14.
Interestingly, the total reflected a decline of 55,000 from the downwardly revised 842,000 in the previous week.
People should take into account that one reason for the decline in jobless claims is the migration of workers. People who have exhausted their regular benefits and have moved to the Pandemic Unemployment Assistance emergency compensation program.
Importantly, that total increased by 509,828 for the week that ended on October 3 to 3.3 million. As a reminder, recipients under that part of the program get an extra 13 weeks of compensation, after exhausting the initial 26 weeks of eligibility.
Jobless claims and its impact on the economy
It is worth noting that, in addition to the substantial drop in the headline number, continuing claims also showed another significant decline. People should keep in mind that, the level of people who get benefits for at least two weeks declined by 1.02 million to 8.37 million. Interestingly, continuing claims operate on a one-week lag from the headline number.
Moreover, the trend helped to lower the insured unemployment rate. This rate is a simple measure of those collecting benefits against the total labor force. The rate declined by 0.7 percentage points to 5.7%.
Unfortunately, jobless claims surged in the week of March 21, as the government-imposed lockdown affected companies. Moreover, bars, restaurants, airlines, and hotels suffered the biggest losses.
Importantly, the weekly totaled peaked at 6.9 million in late March. Moreover, the jobless level is a serious issue. Hopefully, since May, the economy has recaptured around 11.5 million positions. Nevertheless, millions of people are still trying to find a job. Republicans, as well as Democrats, should work together to reach an agreement. They should understand that without another round of stimulus, it would be difficult to get the economy back on track.