Unemployment Claims Dipped But Remained High During Christmas Week
The labor market remains in distress as the pandemic limits consumer activity across the country.
Initial claims for unemployment benefits dropped modestly last week, the Labor Department reported Thursday.
The Christmas holiday likely affected filings because of the shortened workweek, a phenomenon that also occurred during Thanksgiving week. “They bounce up and down a lot during the holidays,” said Gus Faucher, chief economist at PNC Financial Services Group in Pittsburgh.
There were 841,000 new claims for state benefits, compared with 873,000 the previous week. Another 308,000 filed for Pandemic Unemployment Assistance, a federally funded program for part-time workers, the self-employed and others ordinarily ineligible for jobless benefits.
On a seasonally adjusted basis, the number of new state claims was 787,000, a decrease from 806,000 in the previous week.
The $900 billion stimulus package that President Trump signed into law Sunday came after the data was collected. It will take months for the legislation’s full impact to be felt, and most economists expect the rate of layoffs to remain high.
Stricter state and local restrictions on restaurants and other businesses will weigh heavily on the job market in the weeks ahead, said Scott Anderson, chief economist at Bank of the West in San Francisco.
When the Labor Department publishes its monthly jobs report for December next week, Mr. Anderson expects that it will show a rise in the unemployment rate to 6.9 percent, up from 6.7 percent in November. The unemployment rate has fallen sharply since peaking at 14.7 percent in April, but hiring has slowed as the economy has faltered in recent months.
What’s more, the pace of layoffs has been persistently high, as sectors like dining, travel and entertainment struggle because the pandemic is keeping many people at home. By contrast, many white-collar workers who have been able to work remotely have emerged from the economic turbulence relatively unscathed.
The introduction of vaccines is a bright spot, as are positive economic signs, like surging stock prices and a booming housing market. But it will be months before enough Americans can be inoculated to allow people to go to restaurants, events and movie theaters without fear of being infected.
“The trend is not good with the additional closures implemented around the country,” said Carl Tannenbaum, chief economist at Northern Trust in Chicago.