Jobless claims rose for the second straight week, to
778,000, a sign the nationwide surge in virus cases was starting to weigh on
the labor-market recovery.
Claims haven’t risen for two consecutive weeks since July.
Worker filings for unemployment insurance are down sharply from a peak of
nearly seven million in late March. But they remain higher than in any previous
recession—the pre-pandemic peak was 695,000 in 1982—for records tracing back to
1967.
Unemployment filings can be more volatile around the holidays,
due to workweek changes that can cause seasonal-adjustment anomalies. The
four-week moving average, which smooths out weekly variation, increased by
5,000 to 748,500, the Labor Department said Wednesday.
Increases in jobless claims were widespread across states.
Some of the states with sharp increases in virus cases, including Minnesota,
Ohio and Illinois, saw a large rise in claims last week.
Other data released Wednesday showed the broader economic
recovery continued in recent months. Orders of durable, or long-lasting goods,
rose 1.3% in October. The Commerce Department said that its second reading of
gross domestic product growth in the third quarter was unchanged from the
initial estimate, at a 33.1% annual rate, or 7.4% over the prior quarter, while
U.S. company earnings picked up strongly. Consumer spending rose 0.5%, the
sixth straight monthly increase, the Commerce Department said.
A nationwide surge in Covid-19 cases threatens to weigh on
the economic recovery, as many states and localities impose new restrictions on
businesses, though less stringent than the ones introduced in the spring,
economists say. Further, the spread of the virus, combined with the onset of
winter, is likely to send more consumers indoors and hamper spending and employment
in industries like restaurants.
“Covid is driving the bus on the economy, and we’re going to
have some hairpin turns until we get to the nice, straight open road of the
postvaccine world,” said Constance Hunter, chief economist at KPMG LLP.
The U.S. economy continues to recover, albeit more slowly
than when many businesses first reopened from lockdowns in late spring and
early summer. Growth in retail sales and employment has cooled in recent
months, government data show. Consumers’ views toward the economic outlook
soured at the beginning of November, according to the Conference Board, a
private research group.
Still, the labor market has rebounded faster than many
economists projected. The unemployment rate, at 6.9%, is down from April’s
post-World War II high of 14.7%. But recent real-time private-sector data point
to a slowing job market. Growth in job postings has slowed across the U.S.,
according to job site ZipRecruiter. Small-business shutdowns and layoffs have
increased in recent weeks, according to researchers at the University of
Chicago, University of Illinois and University of California, Berkeley. They
analyzed data for 40,000 small businesses that use Homebase, a
scheduling-software company.
The number of people collecting unemployment benefits
through regular state programs, which cover most workers, fell to 6.1 million
for the week ended Nov. 14 from 6.4 million a week earlier, on a seasonally
adjusted basis, according to the Labor Department. Continuing claims declined
throughout the summer and into the fall, a sign many laid-off Americans
returned to work.
However, some of the recent declines in continuing claims
represent individuals who have exhausted the maximum duration of payments available
through regular state programs, and are now collecting money through a federal
program that provides an extra 13 weeks of benefits. About 4.5 million people
were receiving aid through this extended-benefits program in the week ended
Nov. 7—the largest number since the program began this spring, Labor Department
data showed.
Both the extended-benefits program and a program that
provides benefits to those not typically eligible for jobless aid—such as
independent contractors and self-employed individuals—will expire at the end of
this year.
Jason Rossman, 41 years old, of Watertown, Mass., has been
collecting unemployment benefits since he was furloughed this spring from his
project-management job in the trade-show industry. He said jobless benefits,
particularly the extra $600 a week that ended this summer, have helped cushion
his finances. Meanwhile, he is only spending money on essentials like food and
utilities and has stopped dining out at restaurants.
Though he isn’t in dire financial straits, Mr. Rossman said
he hopes to have a job by the time the federal extended-benefits program ends
in December. He has been applying to project-management roles since his
temporary layoff became permanent in early October. But he hasn’t landed one
job interview yet and feels his background in the hard-hit events industry is
limiting his career prospects right now.
“I’m very pessimistic that I’m going to actually find
anything anytime soon,” Mr. Rossman said. He hopes that as vaccines start to
become widely distributed and travel picks up, the trade-show industry will
bounce back so he can return to his former job.
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