Jobless Claims Show Labor Market Improvement, But Not Recovery

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Jobless claims posted a surprise dip below 800,000 for the first time in two months last week, though the state of California adding its own claims numbers after a two-week hiatus combined with an uptick in pandemic assistance suggest a labor market recovery remains elusive.

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.

What's more, economists noted that while regular benefits applications have declined, applications for extended pandemic-related 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 Indeed Hiring Lab economist AnnElizabeth 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."

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