U.S. weekly jobless claims total 885,000, vs 808,000 expected

 


A worrying number of Americans filed new jobless claims last week, underscoring the strain to the labor market as rising COVID-19 cases set off another wave of stay-in-place restrictions that have begun to dampen business activity.

The Department of Labor is set to release its weekly report on new jobless claims Thursday morning at 8:30 a.m. ET. Here are the main results expected in the report, compared to consensus estimates compiled by Bloomberg:

  • Initial jobless claims, the week ended Dec. 12: 885,000 vs. 818,000 expected and a revised 862,000 during the prior week

  • Continuing claims, the week ended Dec. 5: 5.508 million vs. 5.7 million expected and a revised 5.781 million during the prior week

New jobless claims unexpectedly rose for a second straight week. Over the past month, record new COVID-19 case counts and hospitalizations gave way to new mobility restrictions across the country, weighing on employment. Some officials have warned of even more restrictions following the holiday season, as regions look to stem the unabated spread of COVID-19 with widespread vaccine distribution still months away.

These orders have already shown signs of unwinding some of the labor market’s recent strides toward recovery. This week’s report showed another week of new jobless claims coming in at more than 800,000, following a seven-week streak of new claims below that level. Initial jobless claims are about four times greater than their weekly average before the pandemic.

“The recent increase in case counts suggests the labor market could slip even further in the winter months, as hinted at by the latest jobless claims report,” JPMorgan economist Michael Feroli wrote in a recent note. “Even with a vaccine and possibly more fiscal stimulus on the horizon, by this time next year, the labor market will likely fall short of anyone’s idea of full employment.”

Continuing jobless claims, which are reported on a one-week lag, fell more than expected for the week ended December 5, after unexpectedly rising at the end of November for the first time since August. Consensus economists had expected an only slight drop in continuing claims last week, and mostly due to more workers exhausting regular state benefits and rolling onto longer-term federal unemployment programs.

But these federal programs are set to expire at the end of the month unless Congress manages to enact another virus-relief bill before year-end to reauthorize these programs. More than 14 million Americans were claiming assistance as of last week under the Pandemic Emergency Unemployment Compensation and Pandemic Unemployment Assistance programs, both of which originated from Congress’s Coronavirus Aid, Relief, and Economic Security (CARES) Act in the spring.

As of Thursday morning, congressional lawmakers were closing in on a deal reportedly worth about $900 billion, which would include another round of stimulus checks to Americans as well as enhanced federal unemployment benefits. Though lawmakers have remained deadlocked over stimulus negotiations for months, traders and economists have become increasingly hopeful for a deal by year-end, given any coronavirus-relief measures would likely be included as part of the broader government spending package for the fiscal year due to be passed at the end of the week.

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