Applications for first-time weekly jobless claims totaled 709,000 last week, a decline from the previous week but a continuation of elevated levels of unemployment amid a record surge in daily coronavirus cases that could further complicate a recovery in the labor market.
While the new weekly claims total is significantly lower than the March pandemic high of 7 million, it is still far from the pre-pandemic average of 200,000 weekly claims for initial jobless benefits.
More than 21 million Americans are currently claiming some form of unemployment insurance, and Thursday's Labor Department data also shows that unemployed Americans are spending more time out of work. Regular state unemployment assistance expires after 26 weeks, at which point workers can tap 13 weeks of additional federal pandemic unemployment compensation, which was introduced this spring. The number of workers receiving this benefit soared to a record of nearly 4 million last month.
Job openings and labor turnover survey (JOLTS) data released on Wednesday by the Bureau of Labor Statistics showed that hiring is back to pre-pandemic levels, with 10.8 million jobs posted this month, just 2 percent below what was available in February before the coronavirus hit.
However, the number of job openings "didn’t really change from the month before," said Nick Bunker, Indeed Hiring Lab director of research. "The quits rate, a sign of worker confidence, was also very similar to the prior month. For signs of a strong labor market recovery, both of these numbers need to rise. That is not what we are seeing."
With almost 12 million jobs yet to be recovered, the economy still faces a huge shortfall, said Elise Gould, senior economist at the Economic Policy Institute. "For every 18 workers who were officially counted as unemployed, there were only available jobs for 10 of them. That means, no matter what they did, there were no jobs for 5.4 million unemployed workers."
"The Biden administration will be facing a mounting, not waning, crisis," Gould said of the task ahead for President-elect Joe Biden.
The trajectory of Covid-19 continues to alarm public health experts and economists: With coronavirus infection rates reaching as much as 130,000 in one day and hospitalizations reaching record levels, some states have implemented restrictive measures that will likely further shrink employment.
Getting the virus under control will ensure that stores, restaurants, hotels and entertainment venues can stay open, and that Americans will have the confidence — and the disposable income — to take flights, attend ballgames, eat out at restaurants and shop in stores.
Despite news of a promising vaccine candidate, the U.S. is still on track for a slow and grueling economic recovery, economists said.
"The labor market won't be recovered for years," said Ryan Sweet, senior director of economic research at Moody's. "We still have a significant hole to dig ourselves out of."