New unemployment claims in the United States retreated from a four-month high last week, as the job market continued to feel the effects of the pandemic and coronavirus closures.
States reported 900,000 claims for unemployment assistance in the week ending Jan. 16, the Labor Department said Thursday, compared to 910,000 claims from economists. There were 926,000 initial requests in the past week, which marked highest weekly level since August but probably included a boost from requests delayed by the holiday season. The figure for the previous week was also revised down from 965,000.
The number of Americans actively collecting state unemployment benefits fell unexpectedly to 5.1 million on Jan. 9, from 5.2 million a week earlier.
The insured unemployment rate, seen as an alternative measure of unemployment, remained stable at 3.6 percent.
The Federal Pandemic Unemployment Assistance Program, which provides benefits to the self-employed and others who would not qualify for regular benefits, received 423,734 unadjusted claims, up from 284,886 a week earlier.
The U.S. labor market has stumbled following a resurgence of the coronavirus that began in the fall and affected nearly every state across the country, resulting in further restrictions on business and social activities.
“The outlook for fiscal stimulus, along with the wider release of vaccines, points to an improving labor market outlook, but with the pandemic still raging, claims are expected to remain high in the near term,” analysts said. from Oxford Economics.
Federal Reserve officials warned late last year that a further stimulus would be needed to support job growth as the rollout of coronavirus vaccines expanded. Donald Trump signed a $ 900 billion package in December after it was approved by Congress.
Joe Biden, who entered the White House on Wednesday, proposed $ 1.9 billion stimulus and other measures related to the fight against Covid-19, but the plan will likely face resistance from lawmakers who fear passing another massive bill.
Janet Yellen, Former Fed Chairperson and Mr Biden’s candidate for Treasury Secretary, argued that “the smartest thing we can do is act big.”
Promises for new stimulus measures come amid a relentless increase in the death toll in the United States from the pandemic. More than 4,400 deaths, a record, were reported Wednesday. Since the start of the pandemic, Covid-19 has claimed an estimated 400,000 lives in the United States alone, by far the highest in the world.
“It is clear that the resurgence of the pandemic is having a big impact on economic activity and therefore on unemployment claims in some regions, and this is probably the main factor behind higher readings,” said Joshua Shapiro, Chief US Economist at MFR.
Economists have partly attributed the recent spike in jobless claims to the implementation of the December stimulus bill, which provided an additional $ 300 in weekly unemployment assistance.
The pace of claims slowed last week in Texas, Pennsylvania and New York, but accelerated in Arizona, Illinois and Maryland, according to figures put forward which are not seasonally adjusted. The report included an estimate of weekly claims in California that was about a third lower than the week before.
All state and federal programs had a total of 16 million people claiming benefits as of Jan. 2, up from 18.4 million, according to unadjusted figures reported on a two-week delay. This reflected a sharp drop in the number of PUA applicants around the holidays.