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New U.S. jobless claims accelerate to highest since August

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The pace of new jobless claims in the United States accelerated last week to its highest level since August, as the labor market continued to struggle amid a relentless spike in coronavirus cases and deaths .

There were 965,000 seasonally adjusted initial claims for unemployment assistance last week, more than the 784,000 claims the week before, according to the Labor Department on Thursday. The numbers marked the first increase in new claims in a month. Economists had forecast that 795,000 claims had been filed last week.

Persistent claims – the number of Americans who are actively collecting state unemployment benefits – reached 5.3 million on Jan. 2, up from 5.1 million a week earlier. Continuing claims fell 10.6 million at the end of September, but remain above pre-pandemic levels of around 1.7 million.

The insured unemployment rate, seen as an alternative measure of unemployment, fell from 3.5% to 3.7%.

New claims through the Federal Pandemic Unemployment Assistance Program, which provides benefits to the self-employed and others who would not be eligible for regular benefits, increased to 284,470 the last week, up from 161,159 on an unadjusted basis.

The US labor market has stuttered in recent months, 140,000 jobs lost in December amid a sharp rise in coronavirus cases and tighter restrictions on business and social activity. The death toll in the United States is at record highs, while parts of the United States such as California – the country’s largest economy – face high levels of infections and hospitalizations.

The Federal Reserve said an increasing number of its districts reported lower employment levels over the past month. While employment has increased further in a majority of regions, the recovery has been slow and “remained incomplete,” according to the central bank’s beige book report released on Wednesday.

Some employers have said they face staff shortages and struggle to find qualified workers for entry-level and on-site positions – challenges that have been exacerbated by the surge in coronavirus infections.

Kansas City Federal Reserve Chairman Esther George predicted a ‘turn back’ for the U.S. economy once the Covid-19 vaccinations were over, but added that any significant delays in the vaccine rollout would pose the one of the biggest risks to prospects. “It’s hard to imagine a sustainable and robust recovery until the virus interferes with day-to-day decision making,” she said this week.

All state and federal programs had a total of 18.4 million people claiming benefits as of Dec. 26, up from 19.2 million the week before, according to unadjusted figures reported on a two-week delay.

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