New US jobless claims rise sharply to 898,000 last week

WASHINGTON — New applica-tions for US jobless benefits unexpected-ly rose last week to 898,000, the Labour Department said on Thursday.

The 53,000 increase from the prior week was the sharpest rise in seasonally adjust-ed initial claims since the week of August 15, as the United States attempts to re-cover from mass layoffs caused by busi-ness shutdowns earlier this year to stop Covid-19.

The jump brought the levels of initial claims back to where they were in late August, and remained above the single worst week of the 2008-2010 global fi-nancial crisis, the last economic down-turn.

Another 372,891 people also filed claims for benefits under a special program to help workers not normally eligible for benefits and who lost their jobs due to the pandemic, about 91,000 less than the week prior, according to the unadjusted figures.

The report comes amid an ongoing im-passe in Washington over passing more aid to the beleaguered US economy, with Democrats and Republicans still unable to agree on a new stimulus package after the expiration of key measures of the $2.2 trillion CARES Act passed in March.

"Based on today's jobless claims data, the employment situation is fading faster than expected, likely weighed down by tens of thousands of layoffs by major employers such as airlines and Disney," said Robert Frick of Navy Federal Credit Union.

The insured unemployment rate in the week ending October 3, the latest for which data was available, ticked down about a percentage point to 6.8 per cent.

However, Rubeela Farooqi of High Fre-quency Economics said that improvement reflects "people being hired but also indi-viduals exhausting their benefits. Overall, the signal from the claims data is still one of extremely weak conditions in the la-bour market."

Separate data from regional Federal Re-serve banks showed manufacturing con-tinuing its recovery after shutdowns para-lysed production.

The New York Federal Reserve Bank's Empire survey was at 10.5 per cent in Oc-tober, a drop of about seven points from September but indicating manufacturing in New York state and parts of New Jer-sey and Connecticut was expanding for the fourth consecutive month.

Manufacturing activity increased at a faster pace in the area covered by the Philadelphia Federal Reserve Bank, with its industry survey climbing 17 points to 32.3 per cent in this month, as a majority of firms reported an increase in new or-ders.

However, Oren Klachkin of Oxford Eco-nomics warned that with Covid-19 still rife in the US, "Weak demand, supply chain disruptions and virus uncertainty will constrain manufacturing's recovery until a health solution is broadly imple-mented."