Applications for US state unemployment benefits have unexpectedly reached an all-time high in three months, suggesting that the labor market recovery is faltering amid an increase in Kovid-19 cases and increased trade restrictions.
Labor Department data shows that the initial unemployment claims in regular state programs increased from 23,000 to 885,000 in the week ended 12 December. On an unfair basis, the figure dropped to around 21,000.
In the week ending December 5, consecutive claims for state programs declined from 273,000 to 5.51 million. This figure approximates the number of people receiving state unemployment benefits, but does not include the millions of people who have already exhausted those benefits or are receiving aid through federal epidemic unemployed assistance programs. From
A Bloomberg poll of economists called for 818,000 initial state claims and 5.7 million for continuing adjustment claims.
The increase in initial claims reflects rising evils in California and Illinois, two states where governments have imposed a particularly restrictive lockdown in the wake of the latest Kovid-19 surge. That, combined with weather, has led to widespread job losses and increased risk to the economy in the months before widespread vaccine delivery.
With outlook volatility, US lawmakers are working on the final details of a new relief package that would expand the epidemic-free unemployed aid, while the Federal Reserve on Wednesday promised to maintain a “mass bond” of employment and inflation did.
US stock futures gained after the report, while the 10-year Treasury Yield fell.
The latest preliminary claim data also coincides with the reference period for the December jobs report, adding signs that the months may show a weakening labor market in November, after a 245,000 rise in pay in November, by half in October Also benefited less.
On top of regular state claims, about 455,000 preliminary claims for pandemic unemployment assistance were filed last week. The program, which typically provides employmentless benefits to eligible people, like self-employed and gig workers, is scheduled to end later this month without congressional action. The week ended 28 November claimed 9.24 million consecutive weeks, up from the previous week of about 689,000.
In the same week, there were 4.8 million continuing claims for Pandemic Emergency Unemployment Compensation, the federal program that provides benefits for up to 13 additional weeks to those who have exhausted their regular state benefits. That program is also going to end.
While the labor market is struggling, housing remains a bright spot in the economy amid ultra-low interest rates and demand for more space. A separate government report on Thursday showed that a nine-month high forecast in November led to more new home construction.
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