By Geoffrey Smith
Investing.com -- The number of Americans filing initial claims for state jobless benefits last week fell by less than expected to 751,000, in a further sign of the pressure on the labor market as a fresh wave of Covid-19 infections hits the U.S. economy.
Economists had expected a drop to 732,000. Last week's figure was revised upwards by a little under 1% to 758,000, according to Labor Department data released on Thursday.
The number of continuing claims fell by some 560,000 to 7.285 million, also a little higher than forecast.
The initial claims figure is still close to its lowest since late March, when the first wave of layoffs related to Covid-19 lockdowns struck the U.S. economy. However, it's still over three times the rate that claims had run at before the pandemic, and points to ongoing high levels of layoffs, even at the end of the summer in which the economy had recovered strongly from its initial setback.
The total number of people claiming benefits in all programs for the week ending October 17 was 21.508 million, a decrease of 1.15 million from the previous week. While some of that reflects rehiring across the economy, it also reflects an increasing number of people who have lost eligibility for benefits under certain programs, or who have simply left the workforce.
The numbers come against a backdrop of growing evidence that the economy is starting to lose momentum again as the pandemic regains strength at the start of winter. On Wednesday, payrolls processor ADP estimated that only a net 365,000 people found private-sector jobs in the month to October 17, barely half the previous month's job gains.
"People are cutting their social interactions, hurting the leisure and hospitality sectors quite badly. This is not going to get better anytime soon," said Ian Shepherdson, chief economist with Pantheon Macroeconomics, in a note after the ADP report.
The official U.S. government labor market report for October is due out on Friday at 8:30 AM ET.