Fewer Americans applied for jobless aid during Thanksgiving week
Fewer Americans applied for unemployment benefits during the Thanksgiving holiday week, reversing an uptick in jobless claims over the previous two weeks. But claims remain historically high, a sign many companies continue to lay off workers as the economy recovers from the impact of the coronavirus.
Some 712,000 people applied for unemployment benefits in the last week of November, a drop of 75,000 from the week before, the Labor Department said Thursday. Another 288,000 applied for Pandemic Unemployment Assistance, a special program for self-employed and gig workers, as well as others who don't qualify for regular state unemployment.
"Soaring COVID cases and the accompanying tightening of restrictions are hammering the discretionary services sector," Ian Shepherdson, chief economist at Pantheon Macroeconomics, told investors in a note.
"Millions struggling to find work"
A government watchdog has criticized the weekly Labor Department figures, noting earlier this week that delays in processing jobless claims inflate the number of individuals applying for aid.
However, it's clear the economy is still struggling with layoffs nine months after the coronavirus struck. The latest claims figures are three times the level typically seen before the pandemic.
"Even with an increasingly murky unemployment system, it's clear that there are still millions struggling to find work during a pandemic. That has not changed once during this crisis," AnnElizabeth Konkel, economist at the Indeed Hiring Lab, said in a note.
Some economists expect jobless claims to tick back up in the coming weeks, attributing the recent drop to the holiday season.
"Initial claims likely will rebound strongly next week, probably rising above the 800K mark for the first time in eight weeks," Shepherdson said. "Soaring COVID cases and the accompanying tightening of restrictions are hammering the discretionary services sector."
With new coronavirus cases in the U.S. now exceeding 160,000 a day on average, the economic recovery is increasingly in danger, experts say. States and cities are issuing mask mandates, limiting the size of gatherings, restricting restaurant dining, closing gyms, or reducing the hours and capacity of bars, stores and other businesses.
All told, roughly 20 million people are now receiving some type of jobless aid. About 12 million are set to lose their benefits the day after Christmas unless Congress agrees on a plan to extend funding.
Negotiations in Congress have deadlocked for months. But Democratic leaders this week backed a $900 billion proposal as a basis to restart talks, a major concession from earlier proposals that called for $2 trillion in spending.
The Associated Press contributed reporting.
