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Higher Weekly Jobless Claims Raise Concerns of Slowdown in Economic Recovery

  • New jobless claims hit 898,000 for the week ending Oct. 10, the highest level since mid-August
  • Weekly jobless claims have remained above 800,000 for seven weeks, prompting concerns that the economic recovery from COVID-19 is slowing down
  • Factors such as rising virus counts and lack of movement on a new stimulus plan raise further uncertainties about the near-term economy

A total of 898,000 workers filed new jobless claims during the week ending Oct. 10, an increase of 77,000 from the previous week and 68,000 more than expected by Dow Jones economists. The persistent level of newly unemployed workers has raised concerns that the economic recovery from the COVID-19 pandemic is slowing.

While new jobless claims fell in the late spring and early summer due to the easing of COVID-19 restrictions in many areas, they have since remained elevated. Last week marked the seventh week where new jobless claims have been above 800,000, well above the pre-pandemic record of 695,000 set in 1982.

Several major employers have announced thousands of layoffs in recent weeks, and more are expected as state and local governments face shortfalls in tax revenue, colder weather limits outdoor dining opportunities for restaurants, and sectors such as tourism and hospitality continue to see diminished business. Adding to the challeng1es are a lack of progress on a new federal stimulus package and rising COVID-19 cases in several parts of the country, which could lead to another round of lockdowns or restrictions on businesses.

Department of Labor statistics show some positive trends as well. The number of people on some form of unemployment assistance stood at 25.3 million, down about 200,000 from the previous week. Continuing claims have been falling steadily, dropping 1.165 million in the latest report to slightly over 10 million.

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