The number of Americans claiming unemployment benefits from states climbed to 965,000 last week as the surge in COVID-19 infections and measures to contain them accelerate layoffs.
The number of Americans claiming unemployment benefits soared to one million last week, as restrictions that undermine businesses designed to contain the surge in COVID-19 infections continue to hamper the job market recovery in the United States. United States.
Some 965,000 people filed their first unemployment claims with states in the week ending Jan. 9, the US Department of Labor said Thursday. This is the highest reading in five months and an increase of 181,000 from the previous week.
Initial jobless claims are a proxy for layoffs, and last week’s numbers were worse than many economists had expected.
“While the economic outlook for the end of 2021 is optimistic, the recovery in the labor market has taken a step backwards and we expect claims to remain high with the risk that they will rise from levels in the labor market. last week, ”Oxford Economics chief US economist Nancy Vanden Houten wrote in a note to clients on Thursday.
Persistent claims, which measure the total number of laid-off workers receiving state unemployment benefits, rose for the first time since November to 5.27 million in the week ending Jan. 2 – an increase of 199,000 over compared to the previous week’s reading.
The recovery in the US labor market began to stagnate in the last quarter of 2020. In December, the economy cut 140,000 jobs, slowing down seven consecutive months of job gains.
Other economic indicators have also blinked red as the United States continues to break records for COVID-19 infections.
Consumer spending – which powers about two-thirds of U.S. economic growth – fell in November.
The number of people receiving benefits from state and federal programs fell from 744,511 to 18.4 million in the week ending Dec. 26.
Economists attribute the drop to the expiration of federal benefits before a new virus aid bill was signed on December 27. Now that federal jobless benefits have been renewed, those claims could rise again.
The series of new coronavirus relief measures adopted in December include a weekly federal top-up of $ 300 to state unemployment benefits and provisions allowing laid-off workers who qualify to claim up to 24 weeks of federal unemployment benefits after exhausting state aid.
And more government largesse is expected now that Democrats have cemented control of both houses of Congress, allowing President-elect Joe Biden to implement key elements of his economic agenda.
Biden said the December stimulus deal would not be the last and that more generous benefits would be obtained to help the country weather the pandemic.
The elected president is ready to reveal a new $ 1.5 trillion stimulus package on Thursday.