Initial jobless claims dip to 860,000

Initial jobless claims dipped to a seasonally adjusted 860,000 in the week ending Sept. 12, a decrease of 33,000 from the previous week, a sign of gradual but steady improvement for the economy.

Unadjusted claims fell significantly, dropping 8.8 percent to 790,021.

The Labor Department’s weekly report showed that claims the previous week had increased rather than remaining flat, as initially reported.

The report also showed that the total number of people receiving any kind of benefit continued to increase through the end of August, reaching 29.8 million.

While the numbers continued moving in a positive direction, they remain extraordinarily high by historical standards. The weekly initial claims were four times higher than at the same point last year and about 25 percent higher than their pre-pandemic record.

They have now remained at unprecedented levels for 26 weeks, half a year.

Andrew Stettner, senior fellow at left-leaning Century Foundation, said the slow decline is a worrisome sign.

“After falling more steeply in the summer, the number of workers filing unemployment claims has remained stubbornly high over the last five weeks,” he said.

The pain has not been distributed evenly among differing sectors.

“Some of the key pain points for the economy remain as before including small business, airlines, bars and restaurants and retailers,” said Mark Hamrick, a senior economist at Bankrate.com

“At the same time, interest rate-sensitive sectors including housing fare relatively well. Builder sentiment just notched a record high as just one positive sign for the housing market,” he added.

The economy, though still in a dire state, has improved faster than many forecasters predicted early on in the coronavirus crisis. Unemployment, which was expected to remain in double digits into 2021, fell to 8.4 percent in August.

But the persistence of the coronavirus is expected to continue dragging on the economy until a vaccine is widely available, which the Centers for Disease Control and Prevention says will likely not happen until mid-2021.

Updated at 9:05 a.m.