Stocks fall as numbers collecting unemployment benefits rise
San José, CA – On Thursday, September 3 the U.S. stock market took its biggest fall since in three months. The Dow Jones Industrial Average dropped more than 800 points, or almost 3%. The broader S&P 500 index fell more than 3%, while the tech heavy NASDAQ index fell almost 5%. All of these measures of the stock market had been at or near record highs until their share drop.
On the same day, the Labor Department released their weekly report on unemployment insurance. While the usual seasonally adjusted measure of new claims for regular state unemployment insurance fell, it was not really comparable to the previous week as the Labor Department had changed how they did seasonal adjustment. Looking at the non-adjusted numbers, there was a small increase in the new claims, about 1%, to 833,000 for the week ending August 29.
In contrast, new claims for the federal Pandemic Unemployment Assistance, or PUA, for contract and gig workers increased by 25% to almost 760,000 from 610,000 the week before. The broadest measure of people receiving unemployment benefits, including the regular state unemployment, the federal PUA, and the federal Pandemic Emergency Unemployment Compensation and other smaller programs, jumped by 2.2 million people to 29.225 million for the week ending August 15.
While the weekly number of new claims for regular state unemployment is down since April, it still higher than any week before the current recession. Further, the increase in the total number of people actually collecting benefits, shows how bad the labor market still is.