Another 709,000 Americans filed for first-time unemployment benefits last week, marking another modest improvement in the number of those newly unemployed even as coronavirus cases in the U.S. continue to creep higher.
The Department of Labor released its weekly report on new jobless claims Thursday morning at 8:30 a.m. ET. Here were the main results from the report, compared to consensus estimates compiled by Bloomberg:
Initial jobless claims, week ended Nov. 7: 709,000 vs. 731,000 expected and a revised 757,000 during prior week
Continuing claims, week ended Oct. 31: 6.786 million vs. 6.825 million expected and a revised 7.222 million during prior week
The Labor Department report showed an eleventh straight week that new jobless claims totaled below 1 million. But new claims have not yet broken back below 700,000 since the start of the pandemic and have held sharply above levels from before the outbreak. Throughout 2019, new initial unemployment claims were coming in at an average of just over 200,000 per week.
Most U.S. states reported declines in unadjusted new claims last week, led by Georgia with a drop of more than 14,000 initial claims. States grappling with rising new COVID-19 cases including Texas, New Jersey, Kentucky and Florida also reported notable decreases in their numbers of new claims. Washington state, on the other hand, saw the biggest leap last week, with new claims rising by more than 10,000.
Meanwhile, continuing jobless claims, representing the total number of individuals still receiving state unemployment benefits, broke below 7 million for the first time since mid-March for the week ended Oct. 31.
Some of that decline, however, came not because individuals returned to work, but because they rolled off state unemployment benefits and onto longer-term federal programs. As of last week’s report, the number of Americans that joined the Pandemic Emergency Unemployment Compensation program, which provides another several weeks of benefits, increased by another nearly 160,000. And across all programs, about 21.2 million Americans were still receiving some form of unemployment assistance.
Rising COVID-19 cases in the U.S. and the onset of winter, however, have left economists on edge over whether the recent downtrend in new claims might unwind. Daily new cases of the virus broke above 100,000 for the first time since the start of the pandemic on Nov. 4, and have held above that level in every day since, according to data from the New York Times.
However, earlier this week, an explosive leap forward in the race to produce an effective COVID-19 vaccine offered hopes of a sustained economic reopening. On Monday, Pfizer (PFE) and BioNTech (BNTX) announced that their ongoing clinical trial so far showed their vaccine candidate was more than 90% effective in preventing COVID-19. Still, it will likely still be months before their vaccine, or one of their peer biotechnology companies’ candidates, is approved and distributed en masse.
The positive impact of the vaccine on the labor market and other areas of the economy, however, will likely come well before Americans receive their first doses.
“Households and firms are going to plan ahead, for example by booking travel, vacation, and capex [capital expenditures], and the implication is that we will immediately begin to see the positive effects on employment, GDP, and earnings, even before the vaccine is available to the public,” Torsten Slok, chief economist for Apollo Global Management, said in an email earlier this week.