Initial applications for unemployment insurance have changed little over the past week, despite other indicators that the labor market weakened at the end of 2020.
Weekly claims total 787,000 for the week ended Jan. 2, the Labor Department reported Thursday. That was less than the Dow Jones estimate of 815,000 and a slight decrease from the upward revision of 790,000 for the previous week.
The report also showed a 126,000 drop in ongoing claims, dropping the total to 5.07 million. Those receiving benefits from all programs also declined, declining by 420,000 to 19.2 million.
Claims remain well above pre-pandemic levels as a steady increase in Covid infections has caused economic constraints in countries and municipalities across the country.
ADP reported on Wednesday that private leases contracted for the first time since April because companies dumped 123,000 in December. It shows that almost all the layoffs have come at large businesses and in the hospitality industry, as hotels, restaurants and pubs have been hit particularly hard by the winter revival in the pandemic.
“A combination of Covid fears and state-restricted restrictions on activity in the service sector is suppressing business, and no real relief is likely before a sustained decline in hospital pressure emerges; it is likely early in the year. the end of February a story, “he wrote. Ian Shepherdson, Chief Economist of Pantheon Macroeconomics.
The weekly claims figure comes a day before the accurate report on the non-farming payrolls.
The Labor Department is expected to report on Friday that the U.S. economy has added just 50,000 jobs since a turbulent 2020 came to an end, while the unemployment rate is higher to 6.8%, according to Dow Jones estimates.
Even amid the likelihood of rents declining as the year ended, the moving average for four-week claims continued to decline and dropped to 818,750 last week. However, the labor market remains in deep distress as the four-week average ‘ a year ago was 219,750.
At the state level, according to unadjusted data, Illinois reported by far the largest drop in claims at 62,765. Several states have shown more than 10,000 profits, including Colorado, Georgia, Kansas, Virginia and Texas.
Even with the decline in rents, the fourth quarter is expected to show significant growth.
The Atlanta Federal Reserve’s GDP tracker indicates an 8.9% increase in gross domestic product amid increases in consumption and investment.