U.S. Jobless Claims Rose to 898,000 Last Week - WSJ

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The number of new applications for unemployment benefits rose last week to the highest level since late August, as persistent layoffs hold back the economic recovery.

Claims  increased to 898,000 last week , holding above the pre-pandemic high point of 695,000, according to Thursday’s Labor Department report. After steadily declining from a peak of near 7 million in March, claims have clocked in between 800,000 and 900,000 for more than a month as companies readjust their head counts.

“Given that we’re seven months into the pandemic now, these are still incredibly high numbers for initial claims,” said AnnElizabeth Konkel, economist at job site Indeed, noting labor market indicators suggest the recovery is slowing down.

The number of people collecting unemployment benefits through regular state programs, which cover most workers, decreased to about 10 million in the week ended Oct. 3 from 11.2 million the prior week, according to the Labor Department. So-called continuing claims declined throughout the summer, indicating employers continued to hire workers.

Still, 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 2.8 million people were receiving aid through this extended-benefits program in the week ended Sept. 26, representing the largest number since the program began this spring, Labor Department data show.

An increasing number of individuals relying on extended benefits suggests many Americans are experiencing long spells of unemployment. The extended-benefits program is set to expire at the end of this year, though.

Thursday’s data was complicated by California pausing the processing of new claims for two weeks. The state will use this time to clear a backlog of unemployment filings and implement fraud prevention technology, the Labor Department said. As a result, the figures reflect California’s level during the last week before the pause.

Large corporations have announced job cuts in recent weeks, including  AT&T  Inc.’s WarnerMedia,  Walt Disney  Co. and  Allstate  Corp. Many of those workers will likely seek unemployment benefits in the coming weeks.

The economy, more broadly, is flashing signs of slowdown. Monthly job gains have cooled in recent months, as has growth in job postings and consumer spending. More workers are reporting their layoffs are permanent.

A federally funded extra $600 in weekly unemployment benefits expired at the end of July, and President Trump signed an executive order in August to fund an additional $300 in weekly benefits. States were authorized to tap $44 billion in disaster-relief funds to pay up to six weeks in supplemental benefits from the week ended Aug. 1.

The White House over the weekend formally submitted  a $1.88 trillion stimulus proposal , bringing the offer closer to  the $2.2 trillion coronavirus aid legislation  House Democrats passed earlier this month. But the parties involved were  still negotiating Wednesday  over the size and details of a possible deal.

Lateisha Willett, 27 years old, of Davenport, Iowa, was let go in mid-March from the call center where she worked. The additional $600 a week in federal unemployment insurance helped her endure the spring and summer. But that boost expired in July, leaving Ms. Willett to receive the state benefit of just $90 a week, plus an extra $3 granted to care for her 2-year-old son—an amount just shy of the minimum threshold to qualify for extra unemployment benefits that Mr. Trump authorized in August.

Now earning around one-fifth of what she made at the call center, Ms. Willett has fallen behind on her rent. She has applied for 30 jobs in recent months, she said, but none have panned out.

“I’m afraid that everything will just come crashing down. I’ll be evicted, and that will open another door to hell and chaos for me,” she said. “I’m not sure what I can do about it.”

Millions of workers are receiving jobless benefits through a federal pandemic program for the self-employed, gig workers and others not typically eligible for unemployment aid. In the week ended Sept. 26, there were 11.2 million individuals seeking benefits through this program.