The number of Americans who filed for weekly unemployment claims totaled 787,000 last week, while consumers and businesses continue to navigate restrictive measures amid a rapid rise in coronavirus infections.
After a tiring year of job losses, economists forecast a total of 835,000 complaints for the week ending December 26, an increase from the previous week’s revised total of 806,000.
Despite the new vaccines and the approval of a federal emergency aid package, new claims for unemployment insurance remain four times higher than the pre-pandemic average – but well below the March peak of almost 7 million claims.
Lawmakers this week approved an extension of emergency unemployment benefits, with President Donald Trump agreeing on Sunday night to extend aid payments of $ 300 a week until March 14. However, the number of ongoing claims – people who cannot find a job and receive ongoing unemployment insurance – remains just over 5 million, which is at least three times the usual level, which highlights the slow market recovery country work environment.
The economy in general is showing signs of weakening at the end of a challenging year, with spending and consumer confidence falling last month, as consumers continue to stay home, reducing spending on items such as cars, clothes and restaurants . November sales of new homes also fell to a five-month low.
“The barrier could not be less, but after a difficult start, the economy should have a much better 2021,” said Mark Zandi, chief economist at Moody’s Analytics. “If vaccine launches follow roughly the roadmap, the pandemic should be receding and the economy accelerating in the second half of the year. There is a substantial amount of pent-up demand for all activities that consumers have been avoiding since the pandemic struck, and families high-income people have considerable financial firepower to increase their spending. “
However, with 10 million jobs yet to be recovered, the economy is not expected to reach its pace until 2023. More than two out of five families have not recovered the lost income in December, according to a Bankrate.com survey.
“Most of the jobs lost are not coming back,” said Zandi. “While tourism should eventually recover completely, business travel is unlikely to go. Many companies, especially larger multinational companies, have fully adopted Zoom and similar technologies. Physical retail jobs lost in the pandemic to online competitors have also disappeared forever. “
The focus is now on the Bureau of Labor Statistics monthly employment report, which will be released next Friday, which some economists say may show the first decline in jobs added to the economy since April.
