Jobless benefits claims show economy remains far behind
New claims for unemployment benefits remained high last week, the government reported Thursday, the latest evidence that the pandemic-racked economy still has a lot of lost ground to make up in the new year.
The labormarket has improved since the coronavirus pandemic first pummeled the economy. But of the more than 22 million jobs that disappeared in the spring, 10 million remain lost.
With a recently enacted $900 billion relief package that includes an extension of federal unemployment benefits, most of the jobless can at least look forward to more financial help.
Still, “this winter is going to be very difficult,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics. “We’re seeing overall economic momentum is slowing, and that feeds through to the labor market.”
“Employers are very cautious about rehiring at the same time they have had to increase layoffs,” Bostjancic said, “but the resurgenceof the virus is really themain culprit here.”
A fuller picture of December employment will come Friday, when the Labor Department releases its monthly jobs report, and most analysts are expectingminor payroll gains — or even the first net loss since April.
As for Thursday’s report, a total of 922,000 workers filed initial claims for state benefits during the final week of 2020, the Labor Department said. In addition, 161,000 new claims were filed under the federal Pandemic Unemployment Assistance program, which covers freelancers, part-time hires, seasonal workers and others who do not normally qualify for state unemployment benefits.
Neither figure is seasonally adjusted. On a seasonally adjusted basis, new state claims totaled 787,000.
There was a sharp increase in claims for extended state benefits — payments to the long-term unemployed whose regular benefits have run out. But new claims for Pandemic Unemployment Assistance fell, most likely reflecting the exhaustion of benefits before Congress acted.
Some fuzziness surrounding the count could be related to the difficulty of seasonally adjusting the numbers over the holidays, said Ernie Tedeschi, the head of fiscal analysis at Evercore ISI. The unadjusted number for new state claims was up by 77,000 from the previousweek, while the seasonally adjusted number scarcely budged.
But longer-term trends, Tedeschi noted, are more meaningful than any week-to-week changes.