Jobless claims rise as Congress debates stimulus aid
The number of Americans filing for jobless aid is again on the rise, as the economy strains going into the holiday season.
Some 885,000 people filed initial unemployment claims in the week ended December 12, the Labor Department said Thursday. That number, adjusted for seasonal variation, is an increase of 23,000 from the prior week. It's the second week in a row that claims have increased from the week before.
Another 455,000 people applied for Pandemic Unemployment Assistance, a special federal program for the self-employed, gig workers and others who don't qualify for traditional unemployment benefits.
"It's apparent that COVID-19 is still wreaking economic havoc in real time. Not once during the pandemic have total initial claims fallen below one million, and now the trend is headed in the wrong direction for a second week in a row," AnnElizabeth Konkel, economist at the Indeed Hiring Lab, said in a note.
The figures show that, nine months after the coronavirus first slammed the economy, employers are still slashing jobs and workers, and consumers are struggling. Job growth in November slowed sharply, while retail spending, which typically surges in the year-end holiday period, actually dropped in October and November.
With the U.S. seeing 200,000 new cases of coronavirus every day, local governments are putting restrictions on bars, restaurants and other businesses that are weighing down the economic rebound.
"Recent weeks data are signaling a deteriorating trend in the labor market," Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said in a note to investors. "The health crisis is likely to get worse after the upcoming holiday which will translate into even wider limitations on activity, business closures and mounting job losses. Combined with lapsing federal support programs, the impact on incomes and spending will be substantial," Farooqi wrote.
Congressional leaders are reportedly close to a deal that could extend unemployment benefits for laid-off workers. Without such a deal, benefits are set to expire later this month for 12 million jobless people.
On Wednesday, the Federal Reserve signaled that it expects the economy to rebound at a healthy pace next year as vaccinations become widely distributed. But Chair Jerome Powell warned that the next three to six months would likely be painful for the unemployed and small businesses as pandemic cases spike.
The Associated Press contributed reporting.
