US unemployment claims fall to 779,000 however hiring stays weak | Coronavirus pandemic Information
The number of workers in the United States applying to the states for unemployment benefits fell to 779,000 last week. This is still a historically high number, showing that a significant number of people are repeatedly losing jobs due to the virus pandemic.
Last week’s total is down from 812,000 the previous week, the US Department of Labor said on Thursday, and is the lowest in two months. Even before the virus broke out in the US in March, weekly jobless claims had never exceeded 700,000, even during the great 2007-2009 recession.
Thursday’s report reflects a U.S. job market still suffering from the pandemic. Attitude has weakened for six months in a row. This is a major reason President Joe Biden is pushing Congress to pass a $ 1.9 trillion economic rescue program, on top of a $ 900 billion federal aid package approved late last year.
A total of 17.8 million people received unemployment benefits for the week ending January 16, the last time data are available. That’s less than 18.3 million the week before.
Despite the generally poor economic picture, some hopeful signs have surfaced this week. Auto sales rose solidly in January and business growth in the service sector accelerated. Likewise, the expenses for building a house.
This does not mean that there are signs of a recovery in the labor market that tends to lag behind that in the wider economy. Employers have been reluctant to hire at a time when consumer spending has stalled.
The government’s January employment report, due to be released on Friday, is expected to show a modest hiring gain of perhaps 100,000, according to data provider FactSet. The unemployment rate is expected to stay at a high 6.7 percent for a third straight month.
An increase in hires would be a welcome improvement over December, when employers cut jobs for the first time since April. With the economy still shedding nearly 10 million jobs from pre-March levels, a profit this modest size would be of little use to most of the unemployed.
As soon as coronavirus vaccinations become more widely distributed and administered in the coming months, economists expect growth to accelerate on a sustained basis, especially as Congress offers significantly more help to households, small businesses, states and cities. Some analysts believe that under these circumstances, economic growth could exceed 6 percent by 2021.
Consumer spending spiked in January after $ 600 checks were distributed to most adults as part of last year’s $ 900 billion aid package, according to Bank of America’s debit and credit card spending. Michelle Meyer, US economist at Bank of America, estimates these checks will be issued faster than the similar but larger $ 1,200 payments distributed last spring.
A worker cleans along the Las Vegas Strip without the usual crowds as casinos and other businesses are closed due to the coronavirus outbreak in Las Vegas, Nevada, United States [File: John Locher/AP Photo]Still, Americans save the majority of the payments, Meyer said in a research report. This growing pool of savings could help increase consumer spending once the pandemic is brought under control.
At the same time, small businesses struggled through most of January and likely held back hiring last month, according to Homebase, a provider of work scheduling systems for small businesses. According to Homebase, the proportion of its customers who were closed, largely due to government restrictions, increased from December to January and the number of employees decreased.
Although the $ 900 billion stimulus package passed in December extended federal unemployment programs and provided $ 300 weekly unemployment benefits, many states have yet to redistribute the money, according to a Century Foundation report this week. As of Jan. 30, only 38 states were paying benefits under an expanded federal aid program, the report said. Only 40 states issued checks under a separate unemployment benefit program for the self-employed and the self-employed.
The delays were in many cases due to former President Donald Trump’s hesitation in signing the stimulus bill, which he finally passed on December 27. This was one day after the two programs had expired, which meant previous recipients had to reapply for the programs and states had to wait for guidance from the Department of Labor on the details of the expansions. Many states use outdated software for their unemployment insurance systems that can be difficult to update when the unemployment benefit programs change.