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Another 787,000 Americans filed for unemployment benefits last week

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The jobs recovery has run out of steam as the pandemic continues to spread across the country and world. Last week, another 787,000 Americans filed for unemployment benefits, adjusted for seasonal changes, the Labor Department reported Thursday.

It was a slight decrease in claims from the prior week and marginally fewer than economists had expected. But that might be more noise than reality.

“Claims can be volatile around the holidays, so it may be a few weeks before the pattern becomes clear,” said Gus Faucher, chief economist at PNC.

Here’s what we do know: America’s jobs crisis isn’t over.

Last week’s initial claims were still nearly four times as higher as in the same period a year ago.

On top of regular first-time claims, 161,460 workers filed for benefits under the Pandemic Unemployment Assistance program, without seasonal adjustments. The program is designed to help those who aren’t eligible for regular state aid, such as the self-employed. It was a sharp decline from the prior week as various states, including Florida, didn’t report any PUA claims. This could mean a higher reported number or revision in next week’s report.

The PUA program was introduced under last spring’s CARES Act and was slated to expire at the end of 2020. The new stimulus bill that was signed into law last week extends the program by 11 weeks.

While workers can file claims and will receive payments under the extension, there may be a delay in receiving the benefits as it typically takes states a few weeks to reprogram their computers. But some states are moving quickly.

Adding up the different kinds of first-time claims, 1.1 million Americans filed for jobless benefits without seasonal adjustments.

Meanwhile, 5.1 million filed for continued benefits, claiming assistance for their second week or more, in the week ending December 26, a slight decrease from the week before.

In total, 19.2 million people received some form of government benefits in the week ending December 19.

“While prospects for the economy later in 2021 are upbeat, the economy and labor market will have to navigate some difficult terrain between now and then, and we expect claims to remain elevated,” said Nancy Vanden Houten, Lead US Economist at Oxford Economics.

Friday’s jobs report is expected to show the first uptick in the unemployment rate since April. Economists polled by Refinitiv predict that while 71,000 new jobs were added in December, the jobless rate rose to 6.8%.

–Tami Luhby contributed to this story.

Article Topic Follows: Money

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