KEY POINTS

  • Initial unemployment claims fell 55,000 to 787,000 last week
  • The jobless rate was pegged at 5.7%
  • Extended benefits will run out by the end of the year unless Congress acts

Though initial unemployment claims fell by 55,000 last week to 787,000, experts said Thursday it was unclear whether the drop was due to people going back to work or no longer qualifying for benefits.

The weekly report from the Labor Department showed 510,000 jobless Americans applying for extended benefits, which run out the week that ends Dec. 26 unless Congress passes more economic stimulus legislation providing further help.

The Bureau of Labor Statistics pegged the unemployment rate for the week that ended Oct. 10 at 5.7%, down from April’s more than 14% rate and September’s 7.9%.

“This report further shows that Congress has left millions of workers dislocated by the pandemic hanging by a thread,” unemployment expert Andrew Stettner of the Century Foundation told International Business Times in an email.

“As many as 8 million Americans may have fallen into poverty because of the expiration of the CARES Act programs. Payouts from unemployment have plummeted from $25 billion to $6 billion per week as the air has been taken out of the pump priming the economy.”

Bankrate chief economist Mark Hamrick told IBT uncertainty resulting from the coronavirus pandemic is weighing on the economy and likely will not be resolved until the outbreak is brought under control.

“It is difficult to know exactly how many individuals are no longer qualifying for jobless aid, and how many are going back to work when looking at these numbers alone,” Hamrick said, noting Americans are torn between “perceived threats to their personal finances … and the ongoing pandemic” in assessing how to cast their votes in the Nov. 3 general election.

A Yelp internal data released Thursday indicated new restaurant and food businesses have started opening at prepandemic levels and more than 210,000 have reopened. Before the pandemic hit, the National Restaurant Association was predicting $899 billion in revenue for 2020 among the nation’s more than 1 million eateries, which employed 15.6 million people last year.

A large percentage of those on the unemployment rolls worked in the restaurant industry, which was devastated by the pandemic and faces further hurdles with the onset of cold weather in much of the country.

The total number of workers claiming unemployment benefits for the week that ended Oct. 3 topped $23 million compared to less than 1.4 million in the comparable week of 2019. Nearly half, 10.2 million claimed pandemic unemployment assistance and nearly 3.3 million claimed pandemic emergency unemployment compensation.

Hawaii, California, Nevada, Georgia and Puerto Rico registered the highest unemployment rates for the week ended Oct. 3.

For the week ended Oct. 10, California, Illinois, Massachusetts, Georgia and Indiana reported the greatest increases in claims while Michigan, North Carolina, Virginia, Montana and Mississippi reported the biggest decreases.

(Corrected 10/23 to reflect Yelp information based on internal data)