New Unemployment Claims Show Little Sign of Economic Rebound

New claims for state unemployment benefits held steady last week, offering little sign that the U.S. economic recovery is gaining traction.

The Labor Department said on Thursday that 738,000 new claims had been filed, a figure virtually unchanged from the previous week. The seasonally adjusted total was 751,000, significantly lower than in the early weeks of the coronavirus pandemic but still extraordinarily high by historical standards.

Another 363,000 new claims were filed under the federal Pandemic Unemployment Assistance program, which provides benefits to part-time workers, freelancers and others ordinarily ineligible for jobless aid.

“More than a half year after the pandemic-caused downturn began, we remain in a very stressful time for the U.S. economy,” said Mark Hamrick, senior economic analyst for

That economic stress is compounded by the political impasse over new federal aid. The election this week made congressional control likely to remain split, dampening chances for a large package favored by Democrats, though possibly increasing chances for something smaller before year’s end.

“The prospects of a fiscal stimulus over the next few weeks are still quite uncertain, and the possibility of even a stronger economy under a Democratic sweep is now highly unlikely,” said Gregory Daco, chief U.S. economist for Oxford Economics. “As a result, we are that much more concerned about the pace of growth heading into 2021 and the effect on the labor market.”

The labor market has recovered about half of the 22 million jobs lost after the pandemic struck in March, but the gains have been steadily slowing in recent months. Economists expect the Labor Department’s comprehensive October report, due on Friday, to show an increase of 590,000 jobs, compared with 661,000 in September, and a decline in the unemployment rate to 7.7 percent from 7.9 percent.

Experts will also be watching sectors like retailing, and leisure and hospitality, for signs of renewed economic pain. A surge in coronavirus cases in the Midwest has prompted a fresh round of lockdowns, which could lead to more layoffs as businesses close and people feel less comfortable dining in restaurants and shopping in stores.

More Americans are joining the ranks of the long-term unemployed, defined as those out of work for 27 weeks or more, and many have exhausted their state benefits. The number receiving assistance through Pandemic Emergency Unemployment Compensation, which provides 13 weeks of benefits after state unemployment insurance runs out, is rising.

The number of individuals receiving any type of unemployment benefit in the week that ended Oct. 17 declined 1.2 million to 21.5 million, the Labor Department said. More than 60 percent of that total, or 13.3 million, were counted as receiving benefits from Pandemic Emergency Unemployment Compensation or Pandemic Unemployment Assistance, both of which are set to expire at the end of the year. (Some experts say the Pandemic Unemployment Assistance total may be overstated.)

“Whoever becomes the president faces a very formidable challenge in the coming months, as winter weighs down on certain industries that were able to get by with outdoor service, as extended unemployment benefits expire at the end of the year, and as assistance for student-loan borrowers and renters expires,” said Julia Pollak, a labor economist at the career site ZipRecruiter. “A wave of challenges is coming in the direction of workers who have lost their jobs in the pandemic.”

Nelson D. Schwartz contributed reporting.

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