October 26, 2020 — Weekly Jobless Claims Fall Below 800K


757,000 workers filed initial claims for unemployment benefits last week, down 9 percent from a week earlier. It is an improvement, but the number is four times greater than initial claims filed for the same week a year ago. A total of 8 million people filed for benefits last week, a drop of 1 million from October 10.

This seems to be good news as people are returning to work, but there are concerns that the figures are underestimating the true situation.  Many workers have removed themselves from the workforce as benefits have run out for them, or they are staying home to look after their children, or choosing not to return to work because of health fears. They are no longer counted as unemployed.

This Thursday third-quarter GDP numbers will be released. US Q2 GDP fell 31.4 percent, but expectations for Q3 are optimistic with economists looking for 32.5 percent growth. This number will be a better indicator of the scope of the recovery than the labor data.