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Jobless claims preview: Another 734,000 Americans likely filed new unemployment claims last week

Emily McCormick
·Reporter
·3 min read

Another 734,000 Americans are expected to have filed for first-time unemployment benefits last week, marking another modest improvement in the number of those newly unemployed even as coronavirus cases in the U.S. continue to creep higher.

The Department of Labor is set to release its weekly report on new jobless claims Thursday morning at 8:30 a.m. ET. Here are the main results expected from the report, compared to consensus estimates compiled by Bloomberg:

The Labor Department’s forthcoming report is poised to show an eleventh straight week of new jobless claims totaling below 1 million. But new claims have not yet broken back below 700,000 since the start of the pandemic and have held sharply above levels from before the outbreak. Throughout 2019, new initial unemployment claims were coming in at an average of just over 200,000 per week.

Rising COVID-19 cases in the U.S. and the onset of winter, however, have left economists on edge over whether the recent downtrend in new claims might unwind. Daily new cases of the virus broke above 100,000 for the first time since the start of the pandemic on Nov. 4, and have held above that level in every day since, according to data from the New York Times.

“We are watching the trend in weekly initial claims for any reversal of the recent modest declines,” Rubeela Farooqi, chief U.S. economist for High Frequency Economics, said in a recent note. “Against a backdrop of a raging pandemic, risks are skewed to the downside for the labor market.”

However, earlier this week, an explosive leap forward in the race to produce an effective COVID-19 vaccine offered hopes of a sustained economic reopening. On Monday, Pfizer (PFE) and BioNTech (BNTX) announced that their ongoing clinical trial so far showed their vaccine candidate was more than 90% effective in preventing COVID-19. Still, it will likely still be months before their vaccine, or one of their peer biotechnology companies’ candidates, is approved and distributed en masse.

The positive impact of the vaccine on the labor market and other areas of the economy, however, will likely come well before Americans receive their first doses.

“Households and firms are going to plan ahead, for example by booking travel, vacation, and capex [capital expenditures], and the implication is that we will immediately begin to see the positive effects on employment, GDP, and earnings, even before the vaccine is available to the public,” Torsten Slok, chief economist for Apollo Global Management, said in an email earlier this week.

Elsewhere in Thursday’s Labor Department report, economists will also be eyeing an expected improvement in continuing claims. These are expected to break below 7 million for the first time since mid-March.

Some of that decline, however, will likely come not because individuals returned to work, but because they rolled off state unemployment benefits and onto longer-term federal programs. As of last week’s report, the number of Americans that joined the Pandemic Emergency Unemployment Compensation program, which provides another several weeks of benefits, increased by another nearly 278,000. And across all programs, 21.5 million Americans were still receiving some form of unemployment assistance.

This post will be updated with the results of the Labor Department’s jobless claims report Thursday at 8:30 a.m. ET. Check back for updates.

—

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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