WASHINGTON (AP) – The number of Americans claiming unemployment benefits fell slightly last week to 900,000, another record high, indicating ongoing job cuts in a furious pandemic.
Department of Labor report Thursday He pointed out that President Joe Biden inherited an economy that faltered this winter as virus cases rose, cold weather restricted food and federal rescue aid expired. The government said 5.1 million Americans continue to receive state benefits for the unemployed, down from 5.2 million in the previous week. This suggests that while some of the unemployed find employment, others are likely to consume state benefits and switch to separate extended benefit programs.
More than 10 million people receive aid from those extensive programs, which now offer up to 50 weeks of benefits, or from a new program that benefits contractors and the self-employed. In conclusion, almost 16 million people were unemployed in the week ending January 2, the last period for which data are available.
“Unemployment demands continue to show a labor market unable to progress further, as long as COVID-19 remains in the driver’s seat,” said Daniel Zhao, senior economist at Glassdoor. “While the vaccine provides a light at the end of the tunnel, we are still far from a complete reopening of the economy that could lead to recruitment and stop further layoffs.”
New viral infections have started to slow down after months of relentless growth, although they remain high and average about 200,000 a day. The number of deaths in the United States due to the pandemic that broke out 10 months ago has exceeded 400,000.
Economists say a factor that has likely increased unemployment claims in the past two weeks is a government financial aid package which was signed into law at the end of December. Among other things, he offered a federal unemployment benefit of $ 300 a week, in addition to the usual state aid for the unemployed. The new benefit, which runs through mid-March, may encourage more Americans to seek help.
Once vaccines are distributed more widely, economists expect growth to accelerate in the second half of the year as Americans unleash accumulated demand for travel, meals and visits to cinemas and concert halls. Such spending should, in theory, boost employment and start to regain the nearly 10 million jobs lost in the pandemic.
But for now, the economy is losing ground. Retail sales have fallen for three consecutive months. Restrictions on restaurants, bars, and some stores, along with the reluctance of most Americans to shop, travel, and eat out, have led to sharp spending cuts. Revenues from restaurants and bars will fall by 21% in 2020.
The loss of so many jobs has meant hardship for millions of American households. In December, employers cut 140,000 positions, the first loss since April and the sixth consecutive month in which employment has weakened. The unemployment rate remained blocked at 6.7%.
However, there are signs that the $ 900 billion federal aid package adopted late last month could have begun to cushion the damage, largely due to the $ 600 checks sent to most adults. The government began distributing the payments at the end of last month.
These payments probably contributed to increased spending on debit and credit cards issued by Bank of America, economists at the bank wrote last week. Total card spending rose 9.7% for the week ended January 9 compared to the previous year. It rose from a 2% year-over-year increase before incentive payments, Bank of America said.
Biden unveiled $ 1.9 trillion coronavirus plan last week which would provide, among other things, $ 1,400 checks for most Americans, which, in addition to the $ 600 already distributed, would bring the total to $ 2,000 per adult.
The new plan will also provide $ 400 a week in federal benefits for unemployed Americans and extend a moratorium on forced evictions and executions until September. Biden’s proposal will require congressional approval, and some Republicans in Congress have already expressed reservations about its size.