- Weekly jobless claims in the United States increase to 742,000 last week
- Economic recovery continues to face challenges as COVID-19 infections hit record levels
- Vaccine developments offer hope of more stable economic conditions in 2021
A seasonally adjusted total of 742,000 new jobless claims were filed in the United States, up from 711,000 to mark the first increase in four weeks. The data marked a higher than expected level of newly unemployed workers, as Dow Jones economists had expected weekly jobless claims of about 710,000.
Continuing unemployment claims fell from 6.8 million to 6.4 million. While the decrease is due in part to a return of some workers to employment, it also reflects a transition of beneficiaries from state programs to a 13-week emergency compensation program established by the federal government. There were 4.4 million people receiving benefits under this program at the end of last week, up from 4.1 million in the previous week. This program, as well as one geared to gig workers and others who traditionally don’t qualify for state benefits, is set to expire at the end of the year unless Congress takes action to extend it.
Some economists see the increase as a temporary setback in an ongoing economic recovery, with positive signs such as a drop in the four-week moving average of jobless claims. While 20.32 million people remained on some form of unemployment compensation, well above the 1.48 million figure at the same time a year earlier, it was down 841,245 from the last tally.
The labor market has been slowly recovering since the start of the COVID-19 pandemic, recovering approximately 12.1 million of the 22.2 million jobs lost in March and April. However, the economy remains on shaky ground amid sluggish job growth and slow gains in retail sales.
A new wave of COVID-19 infections has also raised concerns, with the U.S. logging more than 100,000 new cases a day since early in November. Several areas have imposed new business restrictions in an effort to contain the virus, further impacting already struggling industries such as restaurants. However, positive news on the potential development of a COVID-19 vaccine brings the hope that more stability will return to the economy next year.
