WASHINGTON (AP) – The number of people seeking unemployment assistance rose to 965,000 last week, the most since the end of August, and a sign that the revived virus has likely escalated layoffs.
The latest figures for jobless claims, published on Thursday by the Department of Labor, remain at unprecedented levels until the virus has struck. Before the pandemic, weekly applications were usually around 225,000. They rose to nearly 7 million last spring after the national shutdowns took effect. Demand fell over the summer, but more than 700,000 have remained since September.
The high rate of redundancies coincides with an economy that has faltered as consumers have avoided traveling, shopping and eating out in the face of rising viral cases. More than 4,300 deaths were reported on Tuesday, another record high. The closure of restaurants, bars and other places where people gather in California, New York and other states has probably forced layoffs.
Some states and cities resist the shutdowns, partly for fear of economic consequences, but increasing the risk of additional infections. Minnesota allowed the resumption of the meal in person this week. Michigan is ready to do the same. Some bars and restaurants in Kansas City are expanding their program.
Economists say that once coronavirus vaccines are distributed more widely, there should be a wider recovery in the second half of the year. The upcoming Biden administration, along with a now Democratic-led House and Senate, is expected to promote more bailouts and spending that could accelerate growth.
However, many analysts also fear that with millions of Americans still unemployed and one in six small companies losing their jobs, the people who have been hardest hit by the crisis are unlikely to benefit from a recovery in soon.
“Although the outlook for the economy later in 2021 is optimistic, the recovery in the labor market has taken a step back,” said Nancy Vanden Houten, an economist at Oxford Economics, “and we expect expectations to remain high, with the risk that they will increase from last week’s levels. ”
Last week’s aid applications could have been partially lifted, as state employment offices were closed during the holidays, asking unemployed people to wait until last week to apply. Adding a $ 300 a week federal unemployment benefit as part of a rescue package adopted late last month could have encouraged more people to apply, Vanden Houten said.
In addition to last week’s first unemployment benefit claims, the government said on Thursday that 5.3 million Americans continue to receive state unemployment benefits, up from 5.1 million in the previous week. This suggests that fewer people who do not have a job find jobs.
About 11.6 million people received unemployment benefits from two federal programs in the week ending December 26, the last period for which data are available. One of these programs offers extensive benefits to people who have exhausted their state aid. The other offers benefits to the self-employed and contract workers.
These two programs had expired at the end of December. They were delayed until mid-March in the $ 900 billion rescue package that Congress approved and President Donald Trump signed the law. This legislation also included $ 600 exemption checks for most adults and an additional $ 300 weekly unemployment benefit payment. Democrats in Congress are in favor of raising checks to $ 2,000 and extending federal aid beyond March, as is President-elect Joe Biden.
The weakness of the US job market was painfully highlighted in the December employment report released by the government last week. Employers quit their jobs for the first time since April, as the pandemic has strengthened its control over consumers and businesses.
The figures also represented a strongly unequal labor market: Last month’s losses were concentrated among restaurants, bars, hotels and entertainment venues – places that offer in-person services that some governments have restricted or avoided by consumers. Education services, mostly colleges and universities, are also reducing workers in December. So are film and music studios.
Most other large industries, however, reported job gains. Many economists expected last spring that job losses would spread to more industries. Although all sectors of the economy initially laid off workers, most avoided deep job cuts. Production, construction and professional services such as engineering and architecture, for example, all added jobs in December.
At the same time, many companies seem reluctant to suddenly accelerate employment. A government report said on Tuesday that employers had promoted fewer open jobs in November than in October. The decline, though small, has spread to most industries. Even now, the nation has nearly 10 million fewer jobs than before the pandemic sent the economy into a deep recession nearly a year ago, after recovering only 56 percent of jobs lost in the spring.