The number of Americans applying for first-time jobless benefits registered a surprise dip last week, falling below 800,000 for the first time since the coronavirus pandemic began to impact the U.S. economy and jobs market.
The Labor Department reported Thursday that 787,000 Americans filed for first-time jobless benefits for the week ended Oct. 17, down from a revised 842,000 claims the week earlier. Economists polled by FactSet had been expecting claims of 895,000.
Continuing claims, which are the number of people not just filing but staying on unemployment benefits, came in at 8.373 million for the week ended Oct. 10, revised downward from 9.397 million the previous week, the Labor Department said.
Revisions to California's jobless claim numbers were partially behind the drop. The country's most populous state put a two-week moratorium on reporting its claims numbers amid expectations of incorrect counting and possible fraud.
"Revisions to the California numbers brought down the headline number, which is a plus, but the total initial claims (non-seasonally adjusted) is still over one million," noted Indeed Hiring Lab economist AnnElizabeth Konkel following the report.
From the onset of the coronavirus pandemic in March, economists and market-watchers have been keeping an eagle eye on weekly jobless claims figures for signs of how the unprecedented economic shutdown and subsequent reopening have impacted the labor market.
While the Labor Department tinkered with its methodology for counting weekly claims back in August, in turn lowering the official weekly number, the weekly tally of claims reported had still remained stubbornly above 800,000 over the past eight weeks.
That said, economists did note that while regular benefits applications have declined, applications for extended benefits have increased.
Through Oct 3, some 10.232 million individuals claimed Pandemic Unemployment Assistance benefits, while another 3.296 million claimed Pandemic Emergency Unemployment Compensation benefits.
"The labor market is far from being out of the woods," said Konkel. "Seven months into the pandemic, the majority of sectors continue to hurt. The sharp rise of expanded benefits claims (PEUC) points to this protracted pain."
To be sure, the number of jobs lost in the pandemic and the number of Americans seeking unemployment benefits have been staggering. While companies have sought to re-hire furloughed workers and the number of people filing for benefits has dropped from a near-7 million peak in March, millions of Americans remain out of work.
With cases of Covid-19 reaccelerating across the country and with no new rescue package from Congress on the horizon, "it looks that the labor market could limp into a bleak winter," Konkel said.