US jobless claims rise again, to 885,000
WASHINGTON – The number of Americans applying for unemployment benefits rose again last week to 885,000, the highest weekly total since September, as a resurgence of coronavirus cases threatens the economy’s recovery from its springtime collapse.
The Labor Department said Thursday that the number of applications increased from 862,000 the previous week. It showed that nine months after the virus paralyzed the economy, many employers are still slashing jobs as the pandemic forces more business restrictions and leads many consumers to stay home. The number of claims was much higher than the 800,000 that economists had expected.
Before the coronavirus erupted in March, weekly jobless claims had typically numbered only about 225,000. The far-higher current pace reflects an employment market under stress and diminished job security for many.
The total number of people who are receiving traditional state unemployment benefits fell to 5.5 million from 5.8 million. That figure is down sharply from its peak of nearly 23 million in May. It means that some jobless Americans are finding jobs and no longer receiving aid. But it also indicates that many of the unemployed have used up their state benefits, which typically expire after six months.
With layoffs still elevated and new confirmed viral cases in the United States now exceeding 200,000 a day on average, the economy’s modest recovery is increasingly in danger. States and cities are issuing mask mandates, limiting the size of gatherings, restricting restaurant dining, closing gyms and reducing the hours and capacity of bars, stores and other businesses.
“U.S. weekly jobless claims continue to head in the wrong direction,” Edward Moya, an analyst at the currency trading firm OANDA, wrote in a research note. “The labor market outlook is bleak as the winter wave of the virus is going to lead to more shutdowns.”
All told, 20.6 million people are now receiving some type of unemployment benefits.
The pandemic has been an economic as well as a health disaster. In March and April, employers slashed a dizzying 22 million jobs after the virus and the measures meant to contain it brought normal business activity to a halt. The nation’s gross domestic product plummeted from April to June at a record annual rate of 31.4%.
The comeback started strong, boosted by a $2 trillion federal rescue package in March. But it has since lost momentum as confirmed COVID-19 cases have surged and Congress has thus far failed to enact further aid. Though GDP expanded at a record annual rate of 33.1% from July-September, the annual pace of growth is thought to be slowing significantly in the current quarter – a slump that’s considered likely to extend into early next year.
The pace of job creation has diminished steadily – from 4.8 million added jobs in June to 1.8 million in July, 1.5 million in August, 711,000 in September, 610,000 in October and 245,000 in November.