US layoffs remain elevated
803,000 seek jobless aid
WASHINGTON — The number of Americans seeking unemployment benefits fell by 89,000 last week to a still-elevated 803,000, evidence that the job market remains under stress nine months after the coronavirus outbreak sent the U.S. economy into recession and caused millions of layoffs.
The latest figure, released Wednesday by the Labor Department, shows that many employers are still cutting jobs as the pandemic tightens business restrictions and leads many consumers to stay home. Before the virus struck, job less claims ty pically numbered around 225,000 a week before shooting up to 6.9 million in early spring when the virus — and efforts to contain it — flattened the economy. The pace of layoffs has since declined but remains historically high in the face of the resurgence of COVID19 cases.
“The fact that more than nine months into the crisis, initial claims are still running at such a high level is, in absolute terms, bad news,” Joshua Shapiro, chief U.S. economist at the economic consulting firm Maria Fiori ni Ramirez Inc., wrote in a research note .“With the pandemic again worsening, it is likely that claims will remain quite elevated for some time.''
The latest data on unemployment claims came on t he same day that the government reported that consumer spending — the principal driver of t he economy — fell in November for the first time since April. The 0.4% drop, coming in the midst of the crucial holiday shopping season, added to concerns that weak consumer spending will slow the economy in coming months. Economists suggested that the viral
crisis, combined with diminished income and col der weather, likely led Americans to pull back in November.
Also on Wednesday, t he government said that sales of new single-family homes sank 11% from October to November, though p urchases remain up nearly 21% from a year ago. Boosted by rock-bottom mortgage rates, housing has proved resilient since the health crisis erupted last spring.
Another report Wednesday showed that orders to U.S. factories for high-cost manufactured goods rose a moderate 0.9% in November, with a key category that tracks business investment plans showin ga gain. The rise in orders for durable goods, which are items that are expected to last at least three years, followed even stronger gains in recent months. The pace of orders has now nearly regained its pre-pandemic level.
In its report on applications for unemployment aid, the government said the total number of people who are receiving traditional state benefits fell to 5.3 million for the week that ended Dec. 12 from a week earlier. That figure had peaked in early May at nearly 23 million. The steady decline since then means that some unemployed Americans are finding work 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.
Millions more job less Americans are now collecting checks under two federal programs that were created in March to ease the economic pain inflicted by the pandemic. Those programs had been set to expire the day after Christmas. On Monday, Congress agreed to extend them as part of a $900 billion pandemic rescue package.
On Tuesday night, though, President Donald Trump suddenly raised doubts about that aid and other federal money by attacking Congress' rescue package as inadequate and suggesting that he might not sign it into law.
The supplemental federal jobless benefit in Congress' new measure has been set at $300 a week — only half the amount provided in March — and will expire in 11 weeks. A separate benefits program for jobless people who have exhausted their regular state aid and another benefits program for self-employed and gig workers will also be extended only until early spring, well before the economy will likely have fully recovered.