New claims for US unemployment benefits pulled back from a four-month high last week, as the labour market continued to feel the effects of the pandemic and coronavirus shutdowns.
States reported 900,000 requests for jobless aid during the week that ended on January 16, the Department of Labor said on Thursday, compared with economists’ forecast for 910,000 claims. There were 926,000 initial claims in the previous week, which marked the highest weekly level since August but likely included a boost from applications delayed by the holiday season. The previous week’s figure was also revised lower from 965,000.
The number of Americans actively collecting state jobless benefits unexpectedly fell to 5.1m as of January 9, compared with 5.2m one week earlier.
The insured unemployment rate, considered an alternative measure of joblessness, remained flat at 3.6 per cent.
The federal Pandemic Unemployment Assistance programme, which provides benefits to the self-employed and others who would not qualify for regular benefits, took in 423,734 claims on an unadjusted basis, from 284,886 a week earlier.
The US labour market has stumbled following a resurgence of coronavirus that began in the autumn and has affected nearly every state in the country, prompting renewed restrictions on business and social activity.
Officials at the Federal Reserve warned that fresh stimulus would be needed to support jobs growth while the rollout of coronavirus vaccines ramps up. Donald Trump signed a $900bn package late last year after it was approved by Congress.
Joe Biden, who entered the White House on Wednesday, has proposed $1.9tn in stimulus and other measures related to fighting Covid-19, but the plan will probably face resistance from lawmakers wary of passing another massive bill.
Janet Yellen, the former Fed chair and Mr Biden’s nominee for Treasury secretary, argued that “the smartest thing we can do is act big”.
Economists have partly attributed the recent acceleration in jobless claims to the implementation of the December stimulus bill, which provided an extra $300 in weekly unemployment aid.
All state and federal programmes had a combined 16m people claiming benefits as of January 2, down from 18.4m, according to unadjusted figures that are reported on a two-week delay. That reflected a sharp decline in PUA claimants around the holidays.