Jobless claims soar again in Washington state, but reasons are unclear

Joanna Estrada
November 26, 2020

"There is a two-tier recovery from the pandemic recession where the top of society continues to spend as normal, while the bottom-half of the country sits in long lines at food banks with the opportunities for employment few and far between", said Chris Rupkey, chief economist at MUFG in NY. Economists prefer the unadjusted number because of earlier difficulties adjusting the claims data for seasonal fluctuations due to the economic shock caused by the pandemic.

"Seeing the combination of a rise in the number of weekly filings for unemployment benefits and an increase in the number of long-term filers is quite concerning and it points to a critical situation as we approach the end of the year, at which point pending any policy decisions, benefits for close to 14 million people will expire", said Gregory Daco, chief USA economist at Oxford Economics.

Unemployment claims dropped from a record 6.867 million in March as about 80% of the people temporarily laid off in March and April were rehired, accounting for most of the rebound in job growth over the last six months.

All told, almost 20.5 million people were receiving aid as of the week ended November 7.

The heart of the problem is an untamed virus: The number of confirmed infections in the United States has shot up to more than 170,000 a day, from fewer than 35,000 in early September. More than 12 million people have been infected in the country, according to a Reuters tally of official data.

Most economists warn that without more government aid, the hardships will deepen for jobless individuals and for struggling businesses and states, which would likely have to slash services and jobs.

More Americans are collecting benefits under programs that were set up to cushion the economic pain from the pandemic.

Stocks on Wall Street were mostly lower. US Treasury prices rose.

The report cited 778,000 claims for the week ending November 21, a five-week high. For the week of November 7, the number of people collecting benefits under the Pandemic Unemployment Assistance program - which offers coverage to gig workers and others who don't qualify for traditional aid - rose by 466,000 to 9.1 million. An ESD spokesperson said more information would be released Thursday. Economists polled by Reuters had forecast 730,000 applications in the latest week.

Iowa Workforce Development said about 43.6 percent of claims are not related to coronavirus. "But given the recent surge in new Covid-19 cases, we think that the data will soften noticeably in November and December".

That improvement, which spilled over to the broader economy through robust consumer spending, was spurred by the fiscal stimulus.

Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans rose 0.7% in October, the Commerce Department said in a third report.

The economy expanded at a record 33.1 per cent annualized pace in the third quarter, unrevised from the initial reading.

Growth estimates for the fourth quarter are below a 5% annualised rate.

-The U.S. merchandise-trade deficit widened in October as imports reached the highest in more than a year, outpacing a gain in the value of exports.

Other reports by Click Lancashire

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