Many more Americans filed new unemployment claims last week than during the previous week, as a resurgence in COVID-19 cases heading into the winter led to more business-constraining social distancing restrictions and pushed more people out of work.
The Department of Labor released its weekly report on new jobless claims Thursday morning at 8:30 a.m. ET. Here were the main results in the report, compared to consensus estimates compiled by Bloomberg:
Initial jobless claims, week ended Dec. 5: 853,000 vs. 725,000 expected and a revised 716,000 during the prior week
Continuing claims, week ended Nov. 28: 5.757 million vs. 5.210 million expected and a revised 5.527 million during the prior week
Thursday’s report ended a seven-week streak during which new jobless claims held below 800,000. New weekly claims are now about four times greater than they were before the pandemic, when they were averaging about 200,000 per week. Still, they are down from a pandemic-era high of nearly 6.9 million in late March.
Jobless claims rose more than anticipated after a brief dip during the previous week. Many economists chalked up the end of November’s greater-than-anticipated improvement in new weekly jobless claims to a technical quirk with adjusting for the Thanksgiving holiday, rather than the start of a sustained trend lower in new claims. In the first five days of December alone, new COVID-19 cases totaled 1 million in the U.S., and additional restrictions across numerous states came into play.
“Filings reversed course last week and surged to the highest level since September,” Rubeela Farooqi, chief U.S. economist for High Frequency Economics, said in an email Thursday. “The prior week’s data were likely distorted by seasonal adjustment issues around the Thanksgiving holiday while the latest data are probably better capturing a deteriorating trend. A health crisis that is likely to worsen after the upcoming holiday is a warning signal for the labor market. Widening virus containment measures are likely to restrict activity more widely and the hit to incomes from related job losses will be compounded by expiring government support measures.”
Continuing jobless claims, meanwhile, unexpectedly rose last week, though the metric has still made strides from its pandemic-era high of nearly 25 million in May.
The number of Americans joining longer-term federal unemployment programs decreased slightly, according to the latest data. Individuals in the Pandemic Emergency Unemployment Compensation program, which offers individuals an additional 13 weeks worth of benefits after they use up their allotted six months of continuing benefits, fell by about 36,000, according to Thursday’s report. The number of Americans collecting benefits via the Pandemic Unemployment Assistance program, which offers benefits to gig and self-employed workers who do not qualify for regular state programs, declined by more than 300,000 to 8.56 million. And overall, about 19 million Americans were claiming unemployment benefits of some form, for a decrease of about 1 million from the previous week.
However, the additional federal unemployment programs are slated to expire by the end of the month, since they were authorized by Congress’ Coronavirus Aid, Relief, and Economic Security (CARES) Act back in the spring and have not yet been renewed. A bipartisan group of lawmakers unveiled a $908 billion new stimulus proposal last week, which would include enhanced federal jobless benefits of $300 per week — or half the amount offered in the original CARES Act — and an extension of pandemic-era unemployment insurance programs.
Treasury Secretary Steven Mnuchin also said Tuesday he presented a separate $916 billion proposal to House Speaker Nancy Pelosi, which would also extend the unemployment programs but exclude weekly enhanced unemployment benefits.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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