US jobless claims decrease

First-time claims for jobless benefits totaled 881,000 last week, according to statistics released Thursday by the US Labor Department, suggesting that the economy's gradual recovery from the novel coronavirus pandemic is continuing.

Economists surveyed by Dow Jones had expected 950,000 new claims to be filed for the week ended Aug 29. In the previous week, ended Aug 22, 1.01 million initial jobless claims had been filed.

"We'll take good news when we can get it," said Mark Hamrick, senior economic analyst for Bankrate, in a statement." Jobless claims came in better than expected and on the decline. The fact remains that these are extremely elevated numbers and we have to brace for further job loss in the coming weeks and months."

US companies cut 22 million jobs in March and April and replaced about 9 million over the next three months.

Continuing claims, or those filed by workers unemployed for a week or more, fell by 1.24 million to 13.25 million. The unemployment rate fell by 0.8 of a percentage point to 9.1 percent, the Labor Department reported.

The federal agency said it changed the way it calculates seasonal adjustments for standard state claims to better align adjusted totals with raw numbers due to distortions created by the pandemic.

The number of initial jobless claims filed in prior weeks weren't revised under the new methods, making comparisons with the latest report more difficult.

"Because of new changes in seasonal adjustment by the Labor Department, we're not able to compare would-be apples to oranges on new claims on a week-over-week basis as during the previous 23 weeks of the downturn," Hamrick said.

Nevertheless, he noted that new claims for unemployment benefits have fallen steadily since the peak of 6.8 million in late March.

"The highest number seen before the pandemic was the 695,000 claims in October 1982, far below this year's (numbers)," Hamrick said.

Amtrak, the federally funded nationwide passenger rail service, said it would furlough about 2,000 workers in October because ridership has plunged during the pandemic.

The planned cuts represent about 10 percent of Amtrak's 20,000-person workforce.

US airlines have also announced cutbacks as demand for travel plunged during the lockdown.

The Congressional Budget Office (CBO) said the federal budget deficit will triple this year to $3.3 trillion, or about 98 percent of the nation's gross domestic product in fiscal year 2020, which ends Sept 30.

That's the highest level since 1945 when the nation spent heavily to fight World War II.

The Dow Jones Industrial Average fell 807.77 points, or 2.78 percent, to 28,292.73 on Thursday as technology stocks that have pulled the market higher recently skidded. It was the largest one-day decline since June 11. Nasdaq and the S&P 500 also declined. The market's decline was not presumed to be related to the jobs report.

The federal government increased spending to boost the economy during the pandemic and to help the unemployed as economic activity plunged.

Increased debt means federal entitlement programs are likely to run out of money sooner than expected.

The CBO said the Highway Trust Fund will be depleted in fiscal year 2021, Medicare Hospital Insurance Trust Fund in 2024 and the Social Security Disability Trust fund in 2026.

The Federal Reserve Beige Book, an anecdotal summary of business activity nationwide, found that US business activity expanded modestly this summer, but remained below its prepandemic level.