“An uptick this far into the crisis underscores that the coronavirus continues to batter the economy, and the magnitude of initial claims shows no respite from new damage,” Indeed Hiring Lab economist AnnElizabeth Konkel said in a note.
The number of new claims has fallen from peaks in the spring but remains historically high. For more than 35 weeks, claims have remained above the pre-pandemic record of 695,000, from 1982, although questions about backlogs, fraud and duplicate claims have complicated the data.
Economists say they are concerned that the virus’s current surge, combined with Congress’s failure to pass more stimulus, could send the recovery backward. Unemployment benefits are set to expire for as many as 12 million people in December because of deadlines established by Congress in March.
With what is expected to be an even worse caseload in many areas across the country, the twin crises of the pandemic and the economic fallout are expected to pave the way for a bleak winter. Meanwhile, a contraction in household spending could threaten even more jobs.
“When consumers are concerned about contracting the virus, there will be less dining out, less browsing in stores,” Konkel said. “This negatively impacts hiring and can lead to layoffs.”