First-time claims for unemployment insurance beat estimates from Wall Street last week as the U.S. economy enters a critical new phase.
The filing totaled 860,000 for the week ending Sept. 12, the Labor Department reported Thursday. Economists surveyed by the Dow Jones had expected 875,000 against last week’s upward 893,000.
The number represents a modest shift in receivables, which had peaked at 6.9 million at the end of March when the economy shut down to try to curb the coronavirus pandemic. Since then, the labor market has recovered, even though millions are still displaced from job cuts associated with the virus measures.
The pace of receivables had little impact on the financial markets, with Wall Street still poised to open sharply lower.
Mohamed El-Erian, chief financial adviser at Allianz, tweeted that the figures were “at a pace below what is both necessary and possible”
Claims had remained above 1 million per week through the end of August. Earlier in September, the Labor Department changed the way it adjusted for seasonal factors to better take into account the impact of viral measures on the economy.
The economy is facing new challenges now after a summer of strong employment growth. Economists and health professionals are afraid that a resurgence in Covid-19 cases could stop or reverse the gains the economy has seen over the past many months.
Another good news was a drop in continued claims, which dropped 916,000 to 12.63 million compared to the 13 million consensus from FactSet .. The four-week moving average for continued claims fell by 532,750 to 13.5 million.
Economists fear that ending state aid to unemployed workers, who provide $ 600 extra a week in addition to what they would normally receive in benefits, would exacerbate job market problems. However, the rate of compensation continues to decline, although the sum is still significantly above anything the United States had seen before the pandemic.
The total receiving benefits, which run a week behind the number of headline claims, actually rose higher for the week ending August 29, to 29.77 million, according to unadjusted figures. At the same time, those receiving benefits under the Pandemic Unemployment Assistance program, which is open to those who would not normally be eligible, fell sharply to 658,737 for the current week, a drop of 209,577.
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