It marked a drop from the previous week and was slightly better than economists had predicted. Even so, complaints were still three and a half times higher than in the same period last year. Overall, unemployment claims remain high, well above historical norms, signaling continued pain in the job market during the coronavirus pandemic.
Holidays and uncertainty about the extent of New Year benefits may have withheld claims last week, according to Nancy Vanden Houten, chief economist at Oxford Economics.
In addition to regular requests for unemployment benefits, another 308,262 workers applied for assistance under the Pandemic Unemployment Assistance program, which offers benefits to people who are not entitled to regular state aid, such as self-employed and temporary workers.
Together, 1.1 million Americans filed for initial unemployment insurance claims, not adjusted for seasonal fluctuations.
“While the decline in total initial claims is a move in the right direction, they have not dropped below a million since the crisis began,” said AnnElizabeth Konkel, contracting lab economist in email comments.
Meanwhile, 5.2 million workers have filed for continuous applications for their second week or more of regular state unemployment benefits in the week ending December 19. In addition, another 4.8 million people received payments under the Pandemic Emergency Unemployment Compensation program in the week of December 12, which offers benefits when workers exhaust their state benefits.
In total, 19.6 million Americans applied for some form of continued unemployment benefits in the week ending December 12.
Ten months after the pandemic started, millions of workers still depend on government payments to survive after losing their livelihood to the crisis. For those lucky enough to get back to work, reducing hours and wages is also a concern.
“While the outlook for the economy in late 2021 is optimistic, the economy and the labor market will have to navigate difficult terrain until then, and we expect the claims to remain high,” wrote Vanden Houten in a note to customers.