The US job market continues to suffer, and Thursday brought more bad news. Another 885,000 people filed for first-time unemployment benefits last week – an increase from the week prior and higher than the 800,000 claims that economists were expecting.
The latest figures, which are adjusted for seasonal factors and reported by the Labor Department, are particularly grim since last week’s numbers were revised up to 862,000. And even before the revision, that week had been the highest level since mid-September.
This was the fourth time in the past five weeks that first-time claims increased from the prior week.
Meanwhile continuing claims, which track the total number of Americans seeking jobless benefits, fell to 5.5 million.
But more than 20.6 million people have now filed for some form of government unemployment benefits in the past four weeks as of November 28. That’s an increase of more than 1.6 million from a week earlier.
And of that total, more than 14 million Americans had filed for help as part of two of the government’s pandemic-related unemployment programs. These programs are set to expire at the end of the year unless the government extends them.
The report comes at a tenuous time for America’s economy.
The last round of Covid-related financial aid from Washington has run out, and Congress is trying to deliver another stimulus package to struggling consumers and businesses in the lame duck session before Joe Biden is inaugurated. Economists and investors are excited about the prospects for a rebound in 2021 now that there is an approved coronavirus vaccine that a few have already received. But many Americans still need help now, a fact not lost on Federal Reserve chair Jerome Powell.
“Although there has been much progress in the labor market since the spring, we will not lose sight of the millions of Americans who remain out of work,” Powell said in a press conference Wednesday after the Fed once again left interest rates near zero.
It will be critical for Congress and the White House to act soon, others say.
“It’s apparent that Covid-19 is still wreaking economic havoc in real time,” said AnnElizabeth Konkel, an economist with Indeed Hiring Lab, in a report. “At nearly 1.4 million, total initial claims are over 6 times higher than during the pre-Covid era.”
Economists at Jefferies added that “the surging number of Covid cases and the reimposition of social distancing policies are making life difficult for service-providing businesses.”
“Until Covid is more under control, claims are going to continue to be elevated,” the Jefferies economists noted in the report, saying that more layoffs in the food industry and other leisure sectors are likely without further government support.