US unemployment claims slip to still-high 787,000

WASHINGTON » The number of Americans seeking unemployment aid fell slightly last week to 787,000, a historically high number that points to a weak job market held back by the viral pandemic.

Thursday’s figure from the Labor Department, a slight decline from the previous week, shows that even with the pandemic recession in its 10th month, many businesses are still laying off workers. Before the recession, weekly jobless claims typically numbered around 225,000.

The renewed surge in virus cases has caused millions of consumers to avoid eating out, shopping and traveling. And states have imposed new restrictions on restaurants, bars and other businesses. Economists at TD Securities estimate that more than half of states are now restricting gatherings to 10 people or fewer, up from roughly a quarter in September.

Those restrictions are forcing many companies, having run through much of their cash reserves, to cut more jobs.

“Unemployment remains extremely high, although not nearly as bad as it was in the spring, and the pace of improvement in the job market has slowed dramatically from the summer,” said Gus Faucher, an economist at PNC Financial. “Job growth should pick up in the spring as vaccine distribution continues, better weather allows for more outdoor activities and states gradually loosen restrictions.”

Many economists, along with the Federal Reserve’s policymakers, say they’re hopeful that once the coronavirus vaccines are more widely distributed, the economy will achieve a broader recovery in the second half of the year.

The $900 billion financial aid package that Congress enacted last month should also help accelerate an eventual rebound. Late on Wednesday, Goldman Sachs upgraded its forecast for economic growth this year to a robust 6.4%, up from 5.9%. Its upgrade was based in part on the expectation that the Biden administration, with help from the now-Democratic Senate, will support another rescue aid package.

Last month’s stimulus measure provided a $300- a-week federal jobless benefit on top of an average state benefit of about $320. As many as half the states are now distributing the federal benefit, according to an unofficial tally at UnemploymentPUA. com. In states that take longer to pay out the $300, any missed payments can be made retroactively.