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Jobless aid applications surged after Thanksgiving

853,000 Americans filed new jobless claims
853,000 Americans filed for unemployment last week 10:07

The number of Americans seeking jobless aid is rising, a sign the nationwide surge in coronavirus cases is hurting the nation's economy and leading to a spike in layoffs.

Some 853,000 people applied for unemployment benefits in the week ending December 5, the Labor Department said Thursday. That number, which is adjusted for seasonal variation, is a jump of 137,000 from the week before and the highest weekly figure in three months. Another 427,600 sought Pandemic Unemployment Assistance, a new federal program for self-employed and gig workers.

While there is uncertainty in the government's weekly figures, as a Government Accountability Office report recently detailed, the jump in workers seeking jobless assistance shows how the pandemic is taking a toll on the labor market, according to experts.

"This was by far the biggest jump in claims since the initial surge in layoffs in the spring," Gus Faucher, chief economist at PNC, said in a note.

"This recent surge suggests that claims are not just stagnating — they're actively worsening. The surge in initial claims is especially concerning when claims are still above levels near the peak of the Great Recession," added Glassdoor Senior Economist Daniel Zhao. 

Payroll gains have steadily shrunk this year after a burst of hiring this summer as people who were temporarily laid off early in the pandemic returned to work. Employers added only 245,000 jobs in November, down sharply from 610,000 in October and the slowest pace of monthly job growth since April.

"Last week's jobs report showed a rapid deceleration in the recovery in November, and surging [unemployment insurance] claims only add to the picture of a slowing recovery this winter."

Las Vegas unemployment numbers hit Great Recession levels 03:35

The total number of people who are receiving state-provided unemployment aid rose for the first time in three months to 5.8 million, from 5.5 million, the government said. That suggests some companies have sharply pulled back on hiring.

All told, 19 million Americans are receiving some form of jobless aid. Unless Congress agrees on an economic support package, 12 million people are set to lose their benefits on December 26.

"The Thanksgiving holiday may still be wreaking some havoc with the data, but the underlying picture is still one of weak labor market conditions as the coronavirus surges," Nancy Vanden Houten of Oxford Economics said in a report.

The Associated Press contributed reporting.

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