America’s Labor Market Recovery Still Has a Long Way to Go
The recovery of America’s workforce continues to slow amid the coronavirus pandemic.
According to the Department of Labor, initial jobless claims totaled 870,000 for the week ended Sept. 19, compared with economists’ bets of 850,000. The number was higher than the prior week’s upwardly revised 866,000 applications.
Included in the data was the number of continuing claims, which paints a broader picture of unemployment in the country and lags jobless numbers by one week. It fell 167,000 to 12.58 million last week.
The mixed report suggested that the United States’ economy is still far away from a full recovery as the COVID-19 health crisis remains a threat to individuals and businesses. While it came in below the one million mark for the fourth consecutive week, the number of people seeking benefits was still historically high. Prior to the outbreak, the previous record for most claims filed came in October 1982 at 695,000. Until mid-March, applications had been hovering at about 200,000.
For the month of August, the Bureau of Labor Statistics reported that American employers added nearly 1.4 million jobs, pushing down the unemployment rate to 8.4%. It was a large drop from the 14.7% high logged in April, when large swaths of the country went into lockdown to help contain the spread of the outbreak; however, it remained significantly higher than pre-pandemic levels, which had hovered in the mid-3% range for some time.
Today’s data comes as U.S. policymakers continue to disagree on how to press forward with a new stimulus package to help boost the economy. On Wednesday, Federal Reserve chairman Jerome Powell, who addressed the bipartisan United States House Select Subcommittee on the Coronavirus Crisis, called for more fiscal support from congressional leaders: “We’ve come a long way pretty quickly, and that’s great. But there’s a long way to go,” he said. “So I just would say we need to stay with it, all of us. The recovery will go faster if there’s support coming both from Congress and from the Fed.”
Last week, the central bank announced that it expects to keep interest rates at zero to 0.25% at least through the next year. It pledged not to hike rates until inflation has grown to 2% and is on track to “moderately exceed 2% for some time.” It will also consider whether the country’s labor market has “reached levels consistent with the committee’s assessments of maximum employment.”
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