The number of Americans who filed initial weekly unemployment claims last week was 787,000, as consumers and businesses are still navigating restrictive measures amid a rapid increase in coronavirus infections.
After a grueling year of job losses, economists forecast a total of 835,000 claims for the week ended December 26, an increase of 806,000 from the previous week.
Despite new vaccines and the passage of a federal first aid kit, new unemployment benefit applications remain four times higher than the average before the pandemic – but well below the March peak of nearly 7 million claims.
Lawmakers this week approved the extension of emergency unemployment benefits, with President Donald Trump agreeing late Sunday night to extend $ 300-a-week extension payments until March 14. The number of ongoing claims – people who are unable to find work and receive continuous unemployment benefits. – remains just over 5 million, which is at least three times its normal level, highlighting the country’s sluggish recovery in the labor market.
The broader economy is showing signs of weakening at the end of a challenging year, with consumer spending and consumer confidence last month as buyers stay at home, limiting spending on items such as cars, clothing and dining out. Sales of new homes for November also fell to a minimum of five months.
“The measure could not have been lower, but after a difficult start, the economy should be much better in 2021,” says Mark Zandi, chief economist at Moody’s Analytics. “If the explosion of vaccines roughly matches the text, the pandemic should subside and the economy increase in the second half of the year. There is a significant amount of pent-up demand for all the activities that consumers have been avoiding since then. The pandemic has hit , and higher-income households have significant financial firepower to increase their spending. ‘
With another 10 million jobs to be recovered, the economy is not expected to emerge until 2023. More than two in five households have not recovered their lost income since December, according to a survey by Bankrate.com.
“Most of the lost jobs are not coming back,” Zandi said. “While tourism will eventually have to fully recover, business travel is unlikely to. Many businesses, especially larger multinationals, have fully embraced Zoom and similar technologies. Retail opportunities in brick-and-mortar that online competitors lost in the pandemic are also gone forever. “
The focus now falls on the accurate monthly employment report of the Bureau of Labor Statistics, which appears next Friday, which according to some economists may show the first decline in jobs added to the economy since April.
