New US jobless claims fell for a third straight week but remained near 800,000, as many businesses struggle under renewed curbs following a resurgence of coronavirus.
The Department of Labor tallied a seasonally adjusted 787,000 initial applications for unemployment benefits in the seven days that ended on January 2nd, compared with 790,000 during the week that included Christmas. The latest figure came in below economists’ forecast for 800,000 new claims.
Continuing claims fell for a fourth straight week. There were 5.1 million Americans actively collecting state jobless aid by December 26th, down from 5.2 million. The insured unemployment rate, considered an alternative measure of joblessness, stayed level at 3.5 per cent.
Pandemic Unemployment Assistance, a federal programme that provides benefits to the self-employed and others who would not qualify for regular benefits, took in 161,460 new claims last week on an unadjusted basis. That was down from 310,462 a week earlier.
“While prospects for the economy later in 2021 are upbeat, the economy and labour market will have to navigate some difficult terrain between now and then, and we expect claims to remain elevated,” analysts at Oxford Economics said.
The US labour market's rebound has slowed as some states implement strict measures to combat a rise in coronavirus infections and hospitalisations, particularly in California and the north-east.
Economists have warned that the resurgence of Covid-19 from the autumn would hamper the recovery, even as the US rolls out vaccines. Estimates show that economists are looking for an increase of 100,000 non-farm jobs in December when the US labour department publishes its monthly report on Friday. That would mark a slowdown in hiring from previous months. The US added 245,000 payrolls in November and 610,000 in October.
The US has recovered 12.3 million of the 22.2 million jobs lost during the height of coronavirus shutdowns in March and April.
Economists have also noted that recent declines in continuing claims, which have fallen from about 10.6 million at the end of September, were partly due to unemployed workers exhausting state benefits - a sign of ongoing challenges for American workers.
As of December 19th, there were 4.5 million active recipients of Pandemic Emergency Unemployment Compensation, a federal programme that offers an additional 13 weeks of benefits to those who ran out of state aid. It was renewed as part of the stimulus package that president Donald Trump signed last month.
The jobless claims report also showed that 19.2 million people were claiming benefits in all state and federal programmes including PEUC, down from 19.6m, according to unadjusted figures that are reported on a two-week delay.
- Copyright The Financial Times Limited 2021
