US weekly jobless claims fall to 751,000 amid slowing recovery

WASHINGTON - The number of initial jobless claims in the United States fell to 751,000 last week, as the labor market continues to recover at a slowing pace, the Labor Department reported on Thursday.

In the week ending Oct 24, the number of Americans filing for unemployment benefits decreased by 40,000 from the previous week's upwardly revised level of 791,000, according to the report released by the department's Bureau of Labor Statistics (BLS).

It marks the second time the number has dipped below 800,000 in the past 32 weeks, and the 10th time it has come in below 1 million.

While it's the lowest level since the start of the pandemic, weekly claims remain above the level hit during the worst week of the financial crisis, Sarah House, senior economist at Wells Fargo Securities, noted.

"The pace of improvement has also slowed since the summer, highlighting that after the record growth rate in GDP last quarter, the recovery's momentum is slowing," House wrote in an analysis.

The claims report was released on the same day as the Commerce Department reported that US economic activity in the third quarter grew at an annual rate of 33.1 percent after a sharp contraction in the previous quarter.

Despite the seemingly fast rebound, the US economy in the third quarter was down by 2.9 percent compared with that a year ago, according to the advance estimate released by the department's Bureau of Economic Analysis.

The economy is still about 3.5 percent smaller than it was at the end of the last year, before it was ravaged by the pandemic.

The claims report also showed that the number of people continuing to collect regular state unemployment benefits in the week ending Oct 17 decreased by 709,000 to 7.76 million.

Analysts, however, noted that the drop came as workers are exhausting those benefits. Workers in most states are eligible for up to 26 weeks of benefits from the regular state program.

Meanwhile, the recipients of Pandemic Emergency Unemployment Compensation, a federal program that provides an additional 13 weeks of benefits for those who exhaust regular state benefits, rose by 387,340 to reach 3.68 million in the week ending Oct 10.

The total number of people claiming benefits in all programs -- state and federal combined -- for the week ending Oct 10 declined by 415,727 yet remained elevated at 22.65 million, indicating the pandemic's severe disruption to the labor market.

"It may not take government restrictions on activity before consumer behavior adjusts to the recent rise in COVID cases across the country, which we suspect will keep businesses under pressure and layoffs elevated in the coming weeks," House said.