The number of Americans filing for jobless aid last week dipped to 900,000, a historically high level showing workers continue to struggle with the COVID-19 surge.
The 900,000 who filed for jobless aid in the week ended January 16 mark a drop of 26,000 from the prior week's figure of 926,000, revised down from an . Another 423,000 people applied for Pandemic Unemployment Assistance, a federal program for the self-employed and gig workers, bringing the total number seeking government help for the newly jobless to more than 1.3 million.
"Taken together, the data on continued state claims confirms that there was a boomlet of pandemic-induced layoffs in December that is adding new strains on the economy and the unemployment system," Andrew Stettner, a senior fellow at the Century Foundation, said in a note.
In all, nearly 16 million people were receiving some sort of jobless assistance as of the first week of the year. The numbers come on the heels of a dismaying December jobs report that showedin the last month of 2020 and nearly 10 million fewer jobs in the economy from a year ago.
"The elevated level of claims points to some deterioration in labor market conditions at the start of the year, although it also likely reflects the extra incentive to claim benefits from the $300 in additional weekly benefits provided by legislation enacted late in December," Lydia Boussour of Oxford Economics told investors in a report.
Worst job market since Great Depression
The high number of claims point to a central challenge facing President Joe Biden, who begins his term amid a historic economic slump that has created the worst job market in the U.S. since the Great Depression. New viral infections remain high, averaging about 200,000 a day, although the rate of new cases is slowing. The number of deaths in the United States from the pandemic that erupted 10 months ago has surpassed 400,000.
Last week, Mr. Biden unveiled athat would provide, among other things, , which, on top of the $600 checks already being distributed, would bring the total to $2,000 per adult. The new plan would also make available $400 a week in additional federal benefits for jobless Americans through September and extend a moratorium on evictions and foreclosures.
Once vaccines become more widely distributed, economists expect growth to accelerate in the second half of the year as Americans unleash pent-up demand for travel, dining out and visiting theaters and concert venues. But for now, the economy is losing ground. Retail sales have fallen for three straight months, and revenue at restaurants and bars plunged 21% in 2020.
"While the vaccine offers a light at the end of the tunnel, we're still far away from a complete reopening of the economy that could drive rehiring and stem further layoffs," Daniel Zhao, senior economist at the job site Glassdoor, said in a note.
The Associated Press contributed reporting.