Unemployment insurance deposits for the first time have been little changed in the last week, despite other indicators showing that the labor market has weakened at the end of 2020.
The weekly claims totaled 787,000 for the week ended Jan. 2, the Labor Department said Thursday. This was lower than the Dow Jones estimate of 815,000 and a slight decrease from the revised upward total of 790,000 for the previous week.
The report also showed a 126,000 drop in continuous demand, bringing the total to 5.07 million. Those benefiting from all programs also fell by 420,000 to 19.2 million.
Claims remain well above pre-pandemic levels, as the continued rise in Covid-19 cases has caused economic constraints in states and municipalities across the country.
On Wednesday, ADP reported that private employment was contracted for the first time since April, as companies paid 123,000 in December. This balance showed that almost all redundancies came in big business and the hospitality industry, as hotels, restaurants and bars were particularly affected by the revival of the winter in the pandemic.
“A combination of Covid fear and state restrictions on service activity is squeezing out business and real relief is not possible until there is a steady decline in pressure on hospitals; this is probably a story for the end of February at the earliest.” , wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics.
The weekly figure for damages comes one day before the non-firm, closely monitored payroll report.
The Department of Labor is expected to report on Friday that the US economy has added just 50,000 jobs, as a tumultuous 2020 is over, while the unemployment rate is rising to 6.8%, according to Dow Jones estimates.
Even against the background of the probability that employment will slow down with the end of the year, the four-week moving average for receivables continued to fall, falling last week to 818,750. However, the labor market remains in deep distress, as the average four weeks ago was 219,750.
At the state level, Illinois reported by far the largest drop in applications to 62,765, according to unadjusted data. Several states showed earnings of over 10,000, including Colorado, Georgia, Kansas, Virginia and Texas.
Even with declining employment, the fourth quarter is expected to show considerable growth.
The Atlanta Federal Reserve’s GDPNow tracker shows an 8.9% increase in gross domestic product amid rising consumption and investment.