(CNN) - Claims for unemployment benefits inched lower last week, the Department of Labor said Thursday. Still millions of Americans continue to rely on government aid to make ends meet.
Last week, 787,000 workers claimed first-time benefits on a seasonally adjusted basis. That's down from the prior week, which was revised significantly lower. Last week marked the first time jobless claims fell below 800,000 since mid-March.
But not everyone is eligible for regular state benefits. Pandemic Unemployment Assistance, which Congress created as part of the CARES Act in the spring, provides benefits for the self-employed and gig workers.
Last week, 345,440 people applied for PUA.
Adding these first-time claims together, initial applications for benefits stood at 1.1 million last week without seasonal adjustments. While that's still a massive number, it's at the lowest level since before the pandemic lockdown.
Continued jobless claims -- which count people who have applied for benefits for at least two weeks in a row -- stood at 8.4 million, about 1 million below the prior week's revised level.
California resumed reporting claims data, after pausing the process to work on its backlog and implement additional fraud prevention measures.
Bad news wrapped in good news
On the face of it, claims figures falling means that fewer people need government benefits to make ends meet -- implying that they have found work again as the economic recovery continues to chug along.
But it's not that simple.
For example, the number of people receiving money under the Pandemic Emergency Unemployment Compensation program, which was created to bridge the gap after workers max out their state benefits, rose to 3.3 million in the week ended October 3. That's up more than half a million from the week before.
States typically provide up to 26 weeks of benefits. The increasing uptick of PEUC benefits is a bad sign for the recovery: it means more people are unemployed for longer.
"Now, 3.3 million Americans are in that program and are in danger of falling into the ranks of the permanently unemployed," said Robert Frick, corporate economist at Navy Federal Credit Union, in emailed comments.
In total, 23.2 million Americans received some form of government jobless benefits in the week ended October 3, down about a million from the week before.
And as Federal Reserve Chairman Jerome Powell has repeatedly warned, workers who are out of a job for longer and become "detached" from the labor force typically have a tough time re-entering the job market later on.
The September jobs report highlighted this issue, as an unexpectedly huge amount of workers dropped out of the labor force. The drop-out rate was particularly high among prime working-age women aged 35-44.
"This report further shows that Congress has left millions of workers dislocated by the pandemic hanging by a thread," Andrew Stettner, senior fellow at The Century Foundation, said in emailed comments.
Negotiations about another stimulus package continue in Washington, but time is running out to get a deal passed before the presidential election in 12 days.