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US Jobs Data Better than Expected

WASHINGTON, DC - MARCH 28: About 1,500 people seeking employment wait in line to enter a job fair at the Arena Stage at the Mead Center for American Theater March 28, 2014 in Washington, DC. Fifteen organizations and businesses from the Washington Metro area participated in the job fair which was sponsored by Arena Stage and DC Council Member Tommy Wells, who is running for mayor of the district. (Photo by Chip Somodevilla/Getty Images)

New claims for US jobless benefits fell to 787,000 last week, the Labor Department said Thursday, dropping below 800,000 for only the second time since the pandemic started.

The big improvement came as new applications fell 55,000, seasonally adjusted, in the week ended October 17, and total claims in the previous week were revised down by 56,000 from the original report, according to the data.

Weekly jobless claims spiked into the millions as business shutdowns began in March to stop Covid-19, and though they have since fallen the improvement had slowed in recent weeks as some government aid programs for busineses expired and the pandemic concerns continued.

Policymakers in Washington remain deadlocked after months of talks on a new stimulus bill to support the unemployed and business owners.

Even with the sharp drop last week, the number of people applying for benefits remained above the single worst week seen during the 2008-2010 global financial crisis, indicating widespread joblessness continues.

And approximately 23.2 million people were receiving benefits under all programs as of the week ended October 3, a drop of about one million from the week prior.

“With fiscal relief package hopes dimming, this situation is worrisome,” Gregory Daco of Oxford Economics tweeted.

Another 345,440 people, not seasonally adjusted, filed claims last week under a program approved during the pandemic for people who would not normally be eligible for aid, bringing the total for the week to around 1.1 million new filings.

The data showed the insured unemployment rate indicating people actually receiving regular benefits dropping to 5.7 percent, but analysts said that indicated not people returning to work but more people moving from those time-limited benefits to the Pandemic Emergency Unemployment Compensation program.

Nearly 510,000 additional people started receiving benefits under that program, which provides an extra 13 weeks of payments, as of October 3, the latest week for when data was available.

Robert Frick of Navy Federal Credit Union warned the nearly 3.3 million total people in that program “are in danger of falling into the ranks of the permanently unemployed.”

The report was the first to include new data for California, after the state paused reporting for a few weeks to address a backlog.

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S. Jack Heffernan Ph.D. Economist at Knightsbridge holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Crypto, Mining, Shipping, Technology and Financial Services.