(BRANDON HANSEN/Chewelah Independent)
The new batch of economic data continues to be something of a mix bag as the nation deals with the COVID-19 pandemic, its economic restrictions and the biggest shock to the economy perhaps in the country’s history.
September saw the national unemployment rate drop to 7.9 percent in September as nonfarm payrolls grew by 661,000 jobs.
However last week, new jobless claims in America rose to 898,000, according to Thursday’s Labor Department report that shows a slowing in hiring in an economy that still has roughly 10.7 million people who are unemployed.
The Labor Department said that new jobless claims rose by 53,000 last week, but the number of people who are continuing to receive jobless benefits dropped by 1.2 million to 10 million.
A drop in those receiving jobless claims could mean many people who were unemployed are getting called back to their jobs, or they have used up all their regular state benefits which usually expire after six months.
The pandemic and the economic shutdown it caused, resulted in the loss of 22 million jobs. This created a historically high number of jobless claims to be filed since March.
Another curious issue is how Americans are spending their jobless benefits and a good chunk of it is getting spent of paying down debt instead of just spending to go directly back into the economy.
Jobless benefit recipients are now receiving only regular state unemployment as the federal weekly supplement of an additional $300 had ended in nearly all states. Economists believe this will cause the unemployed to cut their spending which will in turn weaken the economy. The New York Fed also said nearly one-quarter of jobless benefits were saved, nearly a half were used to pay down debt and just 28 percent was spent in the economy.
The number of people receiving extended benefits jumped by $800,000. Another 373,000 people applied for jobless aid under a seperate program for self-employed, contract work or gig workers now eligible for unemployment.
A new stimulus package has not made its way out of Congress as partisan battles continue to rage. While the economy did see more jobs created over the summer, this hiring is slowing and stalling as winter approaches.