Initial claims for state unemployment benefits dipped 3,000 to a seasonally adjusted 787,000 for the week ended January 2, compared to 790,000 in the prior week, the Labour Department said. — Reuters pic
Still, the economy is unlikely to slide back into recession after the government approved additional pandemic relief in late December, with more fiscal stimulus likely. Democrats on Wednesday won two Senate seats in runoff elections in Georgia, giving the party control of the chamber and boosting the prospects for President-elect Joe Biden's legislative agenda.
Claims were likely held down by difficulties adjusting the data for seasonal fluctuations around this time of the year. Unadjusted claims jumped 77,400 to 922,072 last week. Including a government-funded program for the self-employed, gig workers and others who do not qualify for the regular state unemployment programs, 1.08 million people filed claims last week.
In a second report yesterday, global outplacement firm Challenger, Gray & Christmas said US companies announced 77,030 job cuts in December, up from 64,797 in November. That brought total layoffs in 2020 to a record 2.305 million, a 289 per cent surge compared to 2019. Nearly half of the job cuts were due to the pandemic.
That would be the smallest gain since the jobs recovery started in May and mean the economy recouped about 12.5 million of the 22.2 million jobs lost in March and April. The claims report also showed the number of people receiving benefits after an initial week of aid declined 126,000 to 5.072 million in the week ending December 26. But many have exhausted their eligibility, limited to six months in most states. About 4.517 million workers filed for extended unemployment benefits in the week ending December 19. Roughly 19.177 million people were receiving benefits under all programs in mid-December.