US layoffs remain elevated as 837,000 seek jobless aid

US jobless claims reached 837,000 last week, as layoffs remain high nearly 7 months after virus struck economy, Labor Department says.

News 12 Staff

Oct 1, 2020, 5:13 PM

Updated 1,352 days ago

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The number of Americans seeking unemployment benefits declined last week to a still-high 837,000, evidence that the economy is struggling to sustain a tentative recovery that began this summer.
The Labor Department's report, released Thursday, suggests that companies are still cutting a historically high number of jobs, though the weekly numbers have become less reliable as states have increased their efforts to root out fraudulent claims and process earlier applications that have piled up.
For example, California, which accounts for more than one-quarter of aid applications, simply provided the same figure it submitted the previous week. The state had said it would stop accepting jobless claims online so it could tackle a backlog of 600,000 claims.
Measures of the U.S. economy have been sending mixed signals. Consumer confidence jumped in September, fueled by optimism among higher-income households, though it remains below pre-pandemic levels. And a measure of pending home sales rose in August to a record high, lifted by ultra-low mortgage rates.
Yet some real-time measures indicate that growth has lost momentum with the viral pandemic still squeezing many employers, especially small retailers, hotels, restaurants and airlines, nearly seven months after it paralyzed the economy. An economic index compiled by the Federal Reserve Bank of New York grew in September at a weaker pace than during the summer months.
In its report on jobless claims Thursday, the Labor Department said the number of people who are continuing to receive benefits fell to 11.8 million, extending a steady decline since spring. That suggests that many of the unemployed are being recalled to their old jobs.
But it also reflects the fact that tens of thousands of jobless Americans have exhausted their regular state unemployment benefits. Some of them are likely transitioning to an extended jobless aid program that provides benefits for an additional three months.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story is below:
The government will provide its latest picture Thursday of the pace of layoffs in the United States, which have remained high as some sectors of the economy have rebounded since the viral pandemic erupted in March while others remain depressed.
The still-elevated number of people seeking unemployment benefits each week reflects an economy that has recovered only about half the 22 million jobs that were lost to the pandemic. Many employers, especially small retailers, hotels, restaurants, airlines and entertainment venues, are still struggling. And millions of Americans are facing unemployment with vastly diminished aid since the expiration of a $600-a-week federal benefit this summer.
At the same time, some newly laid-off people are facing delays in receiving unemployment benefits as some state agencies intensify efforts to combat fraudulent applications and clear out backlogged claims. California, the largest state, has stopped processing new applications for two weeks as it seeks to reduce backlogs and pursue suspected fraud.
CHRISTOPHER RUGABER, AP Economics Writer


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