Initial jobless claims hit 881,000; unadjusted claims tick up

The Labor Department reported 881,000 new jobless claims on Thursday, a dip because of a new methodology it now uses to count seasonally adjusted claims. 

It also reported 833,252 new jobless claims without seasonal adjustments, a tick up from the previous week of 821,591 claims. 

A number of economists argue the unadjusted number paints a more accurate picture of a labor market roiled by the coronavirus pandemic.

The figures overall show the toll the pandemic continues to take on the economy and the nation’s workers. The figures were a bit lower, however, that what some had expected. 

Starting Thursday, the Labor Department adjusted its method for calculating seasonal claims to ensure that the headline figure was not distorted due to the historically high volume of claims.

Last week’s figure, though not comparable due to the methodological change, was adjusted to 1,069,250. The change likely marks an end to weekly claims coming in above 1 million, which it has for every week but one since the pandemic began.

Before the pandemic, adjusted initial claims had never breached 700,000.

In a more ominous sign for the economic recovery, the report found that as of Aug. 15, the total number of people claiming any kind of benefits rose significantly to 29.2 million. That increase of 2.2 million from the previous week marks a reversal after several weeks of steady decline. 

That figure could be particularly worrisome because it represents the number of recipients who are missing out on $600 in weekly additional unemployment benefits Congress let expire five weeks ago. 

Congress remains deadlocked on negotiations to reinstate some level of additional benefits, and only a handful of states have been able to pick up the slack on partial benefits using an executive order from President Trump.

Andrew Stettner, senior fellow at The Century Foundation, said that Thursday’s report may stand in sharp contrast to the official unemployment numbers set to be published Friday by the Bureau of Labor Statistics (BLS).

“There are nearly 30 million Americans currently or soon-to-be receiving unemployment insurance benefits, roughly 1 out of every 5 people in the workforce,” he said. 

“Today’s claims data stand in stark contrast to the slightly declined unemployment rate that will likely be reported by the BLS tomorrow morning, underscoring the inadequacy of that measure to capture the scope of the ongoing unemployment crisis,” he continued. 

Friday’s jobs numbers will be based on a survey taken in mid-August.

Updated at 9:06 a.m.