Weekly initial jobless claims reached 898,000 last week, according to data released Thursday by the Department of Labor, a figure that was much higher than analyst expectations of 830,000.
Claims for the week ending Oct. 10 represent the highest number since the week of Aug. 22 and come as negotiations on a new round of stimulus aid remain stalled, with Republicans claiming the Democrats are holding back in order to avoid giving Trump a "win" before Election Day.
"Seven months into the pandemic and on the verge of winter, the labor market is on thin ice," said AnnElizabeth Konkel, economist at Indeed.com hiring services company. "Holiday hiring is sluggish, and many businesses need to make significant changes to ride out the colder months. Additionally, any potential economic boost from a stimulus package continues to be out of reach."
A growing number of business leaders, executives and policymakers are stressing the urgent need for additional stimulus to keep the economy from sinking even further into recession and to provide support for the 20 million people who have lost their job since the coronavirus pandemic hit.
Walmart CEO Doug McMillon called on Congress Thursday to help families and businesses, telling CNBC in an interview, "For both sides, I think what they need to keep in mind is that there are Americans that need them, that don't really care about politics, aren't really tied up in this election and they just need some help."
Federal Reserve Vice Chairman Richard Clarida also touched on the topic on Wednesday, in remarks delivered virtually to the Institute of International Finance.
“It will take some time to return to the levels of economic activity and employment that prevailed at the business cycle peak in February, and additional support from monetary — and likely fiscal — policy will be needed,” Clarida said.
The vice chairman's comments echo the urgency of Fed Chairman Jerome Powell's recent warnings that the economy would face "tragic consequences" if policymakers were to stall on stimulus.
"Even if policy actions ultimately prove to be greater than needed, they will not go to waste. The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods," Powell said in his keynote speech to the National Association for Business Economics last week.
The economy is showing an overall indication of a new slowdown, as infection rates soar in more than one-third of states. There has been a continued rise in the number of furloughed employees whose layoffs have become permanent, and companies continue to separate large swaths of their staff in an attempt to right-size amid the pandemic.
Job postings are still down for occupations directly affected by the coronavirus, mostly tourism, travel and entertainment, according to data from Indeed.com — but the hiring firm has also seen a drop in postings for white-collar jobs, noting that hiring is "far below last year's trend in many higher-wage office sectors like software development and banking and finance."
However, "driving, loading and stocking, construction, manufacturing, and dental postings are above last year's trend," the report noted, as Americans return to services they postponed earlier in the pandemic.