Applications for U.S. state unemployment benefits fell by the most in almost two months, offering some hope that the gradual recovery in the job market will continue despite a spike in COVID-19 infections and renewed business restrictions.
Weekly claims, however, were up in Indiana.
Initial jobless claims in regular state programs decreased by 75,000, to 712,000, in the week ended Nov. 28, the first drop in three weeks, Labor Department data showed Thursday. Without adjustments for seasonal fluctuations, applications dropped by about 122,000 during the period.
Continuing claims—the total pool of Americans on state unemployment benefits—declined 569,000, to 5.52 million, in the week ended Nov. 21.
In Indiana, 23,829 people filed initial unemployment claims in the week ended Nov. 28, up from an adjusted number of 18,829 the previous week. Prior to the pandemic, the state was typically seeing fewer than 3,000 claims per week.
A total of 77,942 people were receiving unemployment benefits in Indiana as of Nov. 21, the Labor Department said. That was down from 84,966 the previous week.
Thursday’s report also showed that an additional 311,675 people applied for jobless benefits nationally last week under the new Pandemic Unemployment Assistance program for self-employed and gig workers. That was increase from 319,694 the previous week.
The national figures were below economists’ projections for 775,000 initial claims and 5.8 million continuing claims, based on the median estimates in Bloomberg surveys. One caveat: seasonal adjustments on claims data tend to be trickier around holidays, and last week included Thanksgiving, making it important to see if the trend holds.
While the latest claims figures show gradual improvement, they’re still well above pre-pandemic levels. The labor market also remains challenged by a rising number of COVID-19 cases and a tightening of business restrictions in parts of the U.S. Some industries such as travel, leisure and hospitality are still depressed by the pandemic and could cut jobs more aggressively in the absence of additional fiscal relief.
All but 10 states and territories posted unadjusted declines in initial claims last week, with some of the biggest drops occurring in California,
Texas, Michigan and Georgia. Illinois, Oregon and Indiana reported the largest increases in filings during the holiday week.
“The plunge in initial claims does not refute the idea that the trend is rising; we expected a sharp fall because of the difficulty of adjusting for Thanksgiving,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note. He had forecast claims of 725,000.
The government’s monthly jobs report on Friday is projected to show payrolls grew by about 475,000 in November, still solid yet the smallest gain in seven months, according to the median forecast in a Bloomberg survey of economists. The jobless rate is forecast to tick down to 6.8% from 6.9%.
A report on Wednesday from ADP Research Institute showed that companies in the U.S. added fewer jobs than expected in November, a sign that businesses are slowing down the rate of hiring as coronavirus cases reach new levels.
Continuing claims for Pandemic Unemployment Assistance, a program that provides benefits to self-employed and gig workers, decreased about 339,000, to 8.87 million, in the week ended Nov. 14. This number, though, is inflated by multiple counting and fraud, according to a government watchdog’s report this week, and the Labor Department plans to add a disclaimer.
Indiana reported 16,689 new applicants for the PUA program in the week ended Nov. 28 after reporting 15,904 new claims the previous week. The state reported 293,432 people were receiving continued PUA aid as of Nov. 14, up from 230,304 the prior week.
More people have moved into extended programs like Pandemic Emergency Unemployment Compensation, but these were put in place by the Cares Act will expire by year-end and leave millions of people without government aid. The number of Americans on PEUC assistance rose slightly, to 4.57 million, in the week ended Nov. 14.