Across US and Europe, pandemic’s grip on economies tightens

WASHINGTON >> The worsening of the viral pandemic across the United States and Europe is threatening their economies and intensifying pressure on governments and central banks on both continents to intervene aggressively.

In a worrisome sign of the harm the virus is inf licting in the U. S., the government said Thursday that the number of Americans seeking unemployment benefits jumped last week to 853,000 — the most since September. The surge in jobless claims made clear that many companies are still shedding workers as states reimpose business shutdowns and consumers avoid shopping, traveling or dining out.

Consumers thus far haven’t spent as much this holiday shopping season as they have in previous years, according to credit and debit card data, and last month U.S. employers added jobs at the slowest pace since April. Restaurants, bars and retailers all cut jobs in November.

Responding to similar pressures, the European Central Bank announced Thursday that it will ramp up its bondbuying program to try to hold down longer- term interest rates to spur borrowing and spending. The ECB’s action coincided with the highest singleday viral death toll in Germany, Europe’s largest economy, and the shutdown of restaurants, bars, gyms, movie theaters and museums in France.

T he coronav irus “is having an impact on consumers, it is having a big impact on the labor force, it is having an impact on businesses,” said Gus Faucher, an economist at PNC Financial. “There are reasons to be concerned.”

When the U. S. Federal Reserve meets next week, it may provide more detailed guidance on how long it will continue its own bond- buying program, which could reassure markets that its purchases won’t end anytime soon. The Fed could announce other moves, such as shifting more of its purchases to longerterm bonds to try to further cut long- term borrowing rates and encourage spending. But most analysts think the Fed will keep that step in reserve.

Last week, the number of Americans who applied for jobless benefits jumped from 716,000 in the previous week. Before the coronavirus paralyzed the economy in March, week ly jobless claims typically numbered only about 225,000.