Weekly jobless claims within the US proceed to rise
© Reuters. FILE PHOTO: People queue up to get free Christmas boxes of groceries in New York
WASHINGTON (Reuters) – The number of Americans filing unemployment benefits for the first time rose unexpectedly last week as an unstoppable surge in new COVID-19 infections hampered business operations and provided more evidence that the recovery in the Economy stalled from the pandemic recession.
Initial government unemployment benefits for the week ended December 12 were a seasonally adjusted 885,000, compared to 862,000 the previous week, the Labor Department said Thursday. Economists polled by Reuters had forecast 800,000 applications in the last week.
Unemployment claims were above their high of 665,000 during the 2007-09 Great Recession, although they fell from a record high of 6.867 million in March.
The weekly unemployment claims report, the most up-to-date data on the health of the economy, followed Wednesday’s data showing retail sales fell for a second straight month in November.
The Federal Reserve kept its policy rate near zero overnight on Wednesday and promised to continue pumping more money into the economy by buying assets to help fight the recession. Fed chairman Jerome Powell told reporters that the pace of economic improvement has “slowed down” and that the road ahead remains “highly uncertain”.
According to a Reuters tally, the US is battling a new COVID-19 outbreak with at least 16.7 million infected and more than 304,000 dead. State and municipalities have reacted with renewed restrictions on businesses, while some consumers avoid crowded places such as shopping malls, restaurants and bars. California, home to nearly 40 million people, issued new tough home stay orders last week.
The restrictions and reduced income as millions of unemployed and underemployed lose a government-funded weekly allowance are undercutting consumer spending, which will lead to more job losses. Although a COVID-19 vaccine is being used, health experts say herd immunity could last months.
Congress moved closer to a $ 900 billion bailout on Wednesday. Economists said the new fiscal stimulus could limit but not fully offset weaker consumer spending and prevent further layoffs. More than $ 3 trillion in government pandemic aid resulted in record economic growth in the third quarter.
Last week’s damage data pertained to the period when the government surveyed farms for the non-farm payroll section of the December employment report. Some economists expect employment to decline this month.
The economy, which plunged into recession in February, created the fewest jobs in six months in November. Only 12.4 million of the 22.2 million jobs lost in March and April were restored. The growth estimates for the fourth quarter are mostly below an annual rate of 5%. Most economists expect the economy to contract in the first three months of 2021.
The economy grew 33.1% in the third quarter after shrinking 31.4% in the April-June quarter. This was the lowest level since government records began in 1947.
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