U.S. Jobless Claims Edge Lower

New applications for unemployment benefits fell sharply last week, suggesting layoffs are easing as the broader economy flashes signs of improvement.
Initial claims for jobless benefits, a proxy for layoffs, declined to 709,000 last week from 757,000 a week earlier, the Labor Department said Thursday. While weekly claims have fallen from a peak of near 7 million at the end of March, they remain well above levels of about 200,000 seen before the coronavirus hit this spring.
The number of people collecting unemployment benefits through regular state programs, which cover most workers, dropped to 6.8 million for the week ended Oct. 31 from 7.2 million a week earlier. Continuing claims are down significantly from their spring levels, reflecting that many laid-off workers have been recalled to jobs or hired elsewhere. Others, though, have exhausted state benefits, a sign many are facing long periods of joblessness.
The decline in unemployment claims adds to other signs the economy is rebounding quickly from the sharp pandemic-induced downturn this spring. Gross domestic output grew a record 7.4% in the third quarter—or at a 33.1% annual rate—the Commerce Department said. Activity in the manufacturing and service sectors rose in October, according to closely watched surveys by the Institute for Supply Management, a private data firm. U.S. consumers have stepped up spending, Commerce data show.
Economists now see a stronger recovery than many had earlier predicted. In a November Wall Street Journal survey, economists projected U.S. gross domestic product would shrink by 2.7% this year, measured from the fourth quarter of 2019, better than the 3.6% contraction they forecast last month.
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