Initial jobless claims drop from 130,000 to 881,000, but decline linked to change in statistical method
Numbers: New jobless claims fell sharply last week to a new pandemic low, but all of the drop is due to a major change in the way data is reported instead of more people finding a job. The labor market has shown no progress in the absence of change.
Initial jobless claims fell from 130,000 to 881,000 seasonally adjusted during the last week of August, the labor ministry said on Thursday. These figures reflect claims traditionally filed through state unemployment offices.
Economists surveyed by MarketWatch had forecast 940,000 new claims in the seven days ended Aug. 29. Yet not all estimates took into account the government’s change in formula for seasonal adjustments.
The Bureau of Labor Statistics said last week it would change its adjustment process to make the report more accurate. The level of seasonally adjusted new claims has been significantly higher than the actual or actual number of people claiming benefits each week, a problem that has become more pronounced over the past month.
The new method started with this week’s report. The BLS does not plan to revise previous data to reflect its new statistical approach.
For a fuller explanation read on The Big Change in Unemployment Claims
The unadjusted or actual number of new jobless claims, meanwhile, suggests that there has been virtually no change over the past week in the number of people claiming benefits. They edged up to 833,352 from 825,761. It was the fifth straight week in which unadjusted claims were less than 1 million.
Regardless of the measure, however, jobless claims are still extremely high. They ran into the 200,000 and were almost half a century away shortly before the coronavirus epidemic broke out.
Also: Has the expired $ 600 federal unemployment benefit prevented people from returning to work?
What happened: New jobless claims increased the most in California (40,000), with smaller increases in Texas and Louisiana. Most notably, they fell in Florida and Georgia, states that suffered a sharp rise in coronavirus cases in early summer.
Adding in self-employed workers who filed under a separate federal program, new actual or unadjusted claims totaled 1.59 million last week. This marks a significant increase from 1.43million the previous week and reflects a potentially worrying recovery
Continuing unemployment claims, or the number of people already receiving benefits, fell to 13.25 million seasonally adjusted in the week of August 22, from 14.49 million. The raw or actual number was a bit smaller.
In total, the number of people receiving benefits under eight state and federal programs rose to 29.2 million unadjusted as of Aug. 15, from 27 million the previous week. The data is published with a delay of two weeks.
Lily: ADP says private sector created 428,000 new jobs less than expected in August
Big picture: The great wave of people returning to work at the start of the summer appears to have faded further into a trickle, making it more difficult for the economy to recover.
Some companies are also laying off more workers permanently or warning they could do so unless sales pick up soon or the government comes to their rescue again.
Lily:The economy slowed in August as some temporary layoffs became permanent
The chances of another government financial bailout soon are not favorable. An extra $ 600 in weekly federal benefits for the unemployed ran out in late July, and a program that paid small businesses to keep employees on their payrolls also expired after Democrats and Republicans failed to agree on another aid program. Neither side has moved much lately.
what do they say? “The data shows that layoffs remain widespread and that the labor market recovery is occurring at a frustratingly slow pace,” said chief US economist Nancy Vanden Houten of Oxford Economics.
Market reaction: The Dow Jones Industrial Average DJIA,
and S&P 500 SPX,
were expected to open in a mixed fashion in Thursday’s deals.