Jobless Claims Fall as Companies Keep Hiring Through Pandemic

Jobless claims are lower than expected as hiring ramps up ahead of the critical holiday shopping season even as Covid-19 cases and hospitalizations surge.
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Jobless claims were lower than expected last week as companies ramped up hiring ahead of the critical holiday shopping season even as Covid-19 cases and hospitalizations continued to surge. 

The Labor Department reported Thursday that 712,000 Americans filed for first-time jobless benefits in the week ended Nov. 28, down from a revised 787,000 claims the week earlier. Economists polled by FactSet had been expecting claims of 778,000.

Continuing claims, which are the number of people not just filing but staying on unemployment benefits, came in at 5.52 million for the week ended Nov. 14, down from a revised 6.089 million the previous week, the Labor Department said.

The weekly total was the lowest since the pandemic shuttered the country in March and April, though still above the record level set prior to the pandemic.

The numbers reflect ongoing recovery in the labor market, even as the pandemic continues to spur closures and lockdowns across the country. They also come amid heightened scrutiny after a government watchdog this week said the data were flawed.

The Government Accountability Office said this week that states have provided inconsistent data to the Labor Department, and that incidents of fraud have in their view distorted the numbers.

Last week's Thanksgiving holiday also likely skewed the numbers, according to economists.

"The plunge in initial claims does not refute the idea that the trend is rising; we expected a sharp fall because of the difficulty of adjusting for Thanksgiving," said Ian Shepherdson, chief economist of Pantheon Economics.

"Soaring Covid cases and the accompanying tightening of restrictions are hammering the discretionary services sector," he said, noting that initial claims "likely will rebound strongly next week, probably rising above the 800,000 mark.

Through October, U.S. employers recovered 12.1 million of the 22 million jobs that were lost in March and April. The Labor Department will release the jobs report for November on Friday. 

Economists polled by FactSet expect that employers added 450,000 jobs in November, a drop from the 638,000 jobs added in October. The unemployment rate is expected to have declined to 6.8% from 6.9% in October.