Before the coronavirus-induced recession, initial unemployment claims never surpassed 700,000. But with the economy strained and millions of Americans unemployed, initial jobless claims fell to 787,000 in the week that ended on Oct. 17, the Labor Department reported on Thursday -- the lowest it's been since the onset of the pandemic.

Signs of Economic Life? Not So Fast:  

The seasonally adjusted number of initial claims dropped by 55,000 applications from the previous week’s whopping total of 842,000. The unadjusted number of claims decreased by 73,125, landing at 756,617.

“It points to modest improvement and suggests that the re-opening recovery is continuing,” Milton Ezrati, a contributor to TNI and chief economist for Vested, a New York-based communications firm, said, referring to the initial jobless claim figure. “That it is still historically high and also suggests that there is a lot of turnover in the workforce.”

Although claims have slowly declined since its 7 million peak in March, economists say that it’s still a massive weekly figure that reflects a strained economy and job market.

“At north of 700,000 initial claims, that would have been very close to an all-time high pre-COVID,” Samuel Rines, chief economist at Avalon Advisors, said.

A reason for the decline in initial jobless claims has been Americans filing for unemployment benefits under the Pandemic Unemployment Assistance (PUA) program, a program recently established by Congress to provide relief for workers who aren’t covered or qualify for regular unemployment insurance. More than 345,440 people applied for PUA, up by 8,200 from the previous week.

Signs of Hope:

The good news is, however, that continuing claims -- or the number of Americans continually receiving unemployment benefits -- tumbled by more than 1 million to 8.4 million for the week ended Oct. 10, suggesting that more Americans are returning to work.

“This is a much more significant measure than the initial claims report. It suggests strongly that on net the economy is creating jobs, that those who applied for unemployment insurance last month, last week for that matter, are able to find work,” Ezrati said. “It is a strong sign that the re-opening recovery still has momentum and that unemployment is continuing to fall.”

Rines also noted that the continuing claims report represents slight progress in the job market, along with some encouraging signs. “While we’re losing a lot of jobs, we are also putting people back to work fairly quickly. That’s the truly important part about what we found out today. Yes, a lot of people are still losing their jobs, and that’s really unfortunate and that’s likely to continue, but we’re also putting people back to work, so they’re falling off the continuing claims ledger much faster.”

Restaurants and Small Businesses Still Impacted, Slow to Recover: 

While the drop in continuing claims shows a minor recovery in the job market, Rines pointed out that, “the part of the labor market that is not healing as quickly and that we really need to be paying attention to as we move forward because those jobs are much harder to create and take a much longer time to get back, are the sub-college degree jobs.” These types of jobs include restaurant and bartending positions -- an industry that was struck hard by the impacts of the pandemic.

“Many small businesses are limping along and may yet have to close their doors. The longer it takes to re-open fully, the greater the risk here,” Ezrati added.

Unemployed Americans should expect another round of added jobless benefits in the next coronavirus stimulus package, as negotiations between top White House aides and Democrats over the next round of relief are predicted to reach an agreement by the end of the week. With the risks of a brutal send wave of COVID-19, unemployed Americans need more aid to financially combat the economic crisis triggered by the deadly disease.

Rachel Bucchino is a reporter at the National Interest. Her work has appeared in The Washington Post, U.S. News & World Report and The Hill.

Image: U.S. President Donald Trump gestures to reporters as he walks from Marine One with first lady Melania Trump to board Air Force One as they depart Washington on campaign travel to Nashville, Tennessee to attend his second and final debate with Democratic presidential nominee Joe Biden, at Joint Base Andrews, Maryland, U.S., October 22, 2020. REUTERS/Tom Brenner.