Thursday, March 30, 2023

Unemployment claims in US drop unexpectedly for second week Coronavirus pandemic news

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State unemployment claims slipped to 787,000 for the week ending Dec. 26, the US Department of Labor said.

The number of Americans who apply for unemployment benefits for the first time fell unexpectedly for a second week in a row. But the number of unemployed in the United States remains high more than nine months after the onset of the health and economic crisis triggered by the coronavirus pandemic, signaling a long recovery in the labor market.

Initial claims for state unemployment benefits slipped to 787,000 seasonally adjusted for the week ended Dec. 26, from 806,000 the week before, the Labor Department said Thursday. Economists polled by the Reuters news agency had expected 833,000 candidates last week.

As of Dec. 19, the number of people continuing to receive benefits under the state’s regular unemployment insurance programs fell to 5.219 million, the lowest since April, from 5.322 million the previous week.

The report also showed that as of mid-December, more than 19.5 million people were receiving some form of unemployment assistance, including emergency measures recently extended by the latest coronavirus assistance bill. .

Although initial jobless claims fell from a record 6.867 million in March, they have remained above their peak of 665,000 during the Great Recession of 2007-2009.

The last report’s end date – December 26 – was when as many as 14 million people were on the verge of losing unemployment benefits provided by a $ 3 trillion pandemic relief bill passed. in spring.

It was a cliff that lawmakers had run to avoid, passing an additional nearly $ 900 billion package in the days leading up to Christmas, including $ 600 payments to most individuals and extensions of unemployment benefits and benefits. moratoriums on evictions.

US President Donald Trump, however, insulted the deal brokered by his own Treasury secretary, demanding higher payments to individuals, and only signed it on Sunday after numerous insults from senior lawmakers of his Republican Party.

It is not known whether this lapse had a significant effect on last week’s data or what effect it might have on the level of claims in the current week and in the new year.

“We believe vacation noise and uncertainty over benefit extensions may have dampened claims last week, and the risk is an increase in claims in the weeks to come now that emergency programs have been extended and that an additional $ 300 of weekly benefits are provided, ”said Nancy Vanden Houten, senior US economist at Oxford Economics, in a note.

The weekly jobless claims report is considered the most recent data on the health of the economy. The high level of claims aligns with other recent weak economic reports, including a drop in consumer confidence to a four-month low in December and a drop in consumer spending and income last month.

The growth in COVID-19 cases also remains high, although the surge in new infections for now appears to have peaked in mid-December, according to a Reuters tally.

Restrictions on business, especially in the food and hospitality industries, remain in place in many parts of the country, hampering consumer spending and employment.

“The new stimulus package is a lifeline, but containing the virus is the only way to end the economic chaos completely,” AnnElizabeth Konkel, economist at Indeed Hiring Lab, said in a note. “Even then, a full recovery will have to overcome the hurdle of rising long-term unemployment.”


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