WASHINGTON (AP) – The number of Americans seeking unemployment insurance fell slightly last week to 900,000, still a historically high level that points to ongoing job cuts in a violent pandemic.
Department of Labor report on Thursday He pointed out that President Joe Biden inherited an economy that faltered this winter, with the increase in cases of viruses, cold weather restricted to dinners and the end of federal bailout. The government said 5.1 million Americans continue to receive state unemployment benefits, up from 5.2 million the week before. This suggests that while some unemployed people are finding jobs, others are probably using their state benefits and making the transition to separate extended benefit programs.
More than 10 million people are receiving help from these extended programs, which now offer up to 50 weeks of benefits, or from a new program that offers benefits to contractors and freelancers. Altogether, almost 16 million people were unemployed in the week ending January 2, the last period for which data are available.
“Unemployment claims continue to show a job market that is unable to progress further as long as COVID-19 remains in the driver’s seat,” said Daniel Zhao, senior economist at Glassdoor. “Although the vaccine offers a light at the end of the tunnel, we are still far from a complete reopening of the economy, which could lead to rehiring and preventing further layoffs.”
New viral infections began to subside after months of relentless increases, although they remain high and average around 200,000 a day. The number of deaths in the United States due to the pandemic that broke out 10 months ago has exceeded 400,000.
Economists say one factor that has likely increased unemployment claims in the past two weeks is a government financial aid package which was signed into law at the end of December. Among other things, it provided federal unemployment insurance of $ 300 a week, in addition to regular state unemployment benefits. The new benefit, which runs through mid-March, may be encouraging more Americans to ask for help.
As vaccines become more widely distributed, economists expect growth to accelerate in the second half of the year, as Americans release pent-up demand for travel, dining and visits to movie theaters and concert halls. These expenditures should, in theory, boost hiring and begin to recover the nearly 10 million jobs lost to the pandemic.
But for now, the economy is losing ground. Retail sales fell for three consecutive months. Restrictions on restaurants, bars and some stores, along with most Americans’ reluctance to shop, travel and eat out, have led to drastic spending cuts. Revenue from restaurants and bars plummeted 21% in 2020.
The loss of so many jobs has meant difficulties for millions of American families. In December, employers cut 140,000 positions, the first loss since April and the sixth consecutive month in which hires have weakened. The unemployment rate remained stagnant at 6.7%, still high.
Still, there are signs that the $ 900 billion federal aid package enacted at the end of last month may have started to cushion the damage, largely thanks to the $ 600 checks sent to most adults. The government started distributing payments at the end of last month.
These payments likely helped drive an increase in spending on debit and credit cards issued by Bank of America, bank economists wrote last week. Total card spending increased 9.7% in the week ending January 9, compared to the previous year. That was a 2% year-over-year increase before stimulus payments, said Bank of America.
Last week, Biden unveiled a $ 1.9 trillion plan for coronavirus this would provide, among other things, checks for $ 1,400 for most Americans, which, in addition to the $ 600 already distributed, would raise the total to $ 2,000 per adult.
The new plan would also make $ 400 a week in federal benefits available to unemployed Americans and extend a moratorium on evictions and foreclosures until September. Biden’s proposal will require Congressional approval, and some Congressional Republicans have already expressed reservations about its size.