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Some 800,000 Americans applied for jobless aid the week before Christmas

803,000 new unemployment claims
803,000 new unemployment claims 06:55

The number of people applying for jobless aid fell slightly last week but remained at a high level, showing the coronavirus continues to take a toll on the economy.

Some 803,000 people applied for unemployment benefits in the week ending December 19, the Labor Department said Wednesday. That's a drop of 89,000 from the week before.

Another 397,000 applied for Pandemic Unemployment Assistance, a federal program for the self-employed and gig workers. 

"Even with the potential new stimulus package, labor market damage continues to mount in real time. Total initial claims (non-seasonally adjusted) ticked down but remain above one million even ten months into this crisis," AnnElizabeth Konkel, economist at the Indeed Hiring Lab, said in a note.

All together, 20.4 million people, or about 1 in 8 workers, were receiving some type of unemployment benefit as of early December.

Before the virus struck, jobless applications typically hovered around 225,000 a week. They shot up to 6.9 million in early spring when the virus — and lockdown efforts to contain it — flattened the economy. The number has since come down but remains at historically high levels.

In other U.S. economic news, personal incomes fell 1.1% last month, the Commerce Department said in a separate report Wednesday. It's the third drop in the past four months, signaling that Americans are feeling the pinch as various government relief programs expire and new COVID-19 waves around the country spark renewed business shutdowns and persuade millions of citizens to stay at home. U.S. consumer spending in November fell for the first time since April, dropping 0.4% in what is typically a robust end-of-year shopping period.

Congress this week reached a deal to extend jobless benefits as part of a $900 billion economic rescue package. The deal extends unemployment benefits — which are set to expire on December 26 — for another 11 weeks and adds $300 to a jobless worker's typical weekly benefit. 

But on Tuesday night, President Donald Trump attacked the deal as inadequate, suggesting that he might not sign it into law unless stimulus check amounts of $600 to many Americans were increased to $2,000.

The Associated Press contributed reporting.

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