The number of Americans filing first-time claims for jobless benefits unexpectedly dipped last week while staying extremely high, with the labour market recovery appearing to stall as a raging Covid-19 pandemic threatens to overwhelm the country.Still, the economy is unlikely to slide back into recession after the government approved additional pandemic relief in late December.
Initial claims for state unemployment benefits dipped 3,000 to a seasonally adjusted 787,000 for the week ended Jan 2, compared to 790,000 in the prior week, the Labor Department said.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.
Covid-19 cases in the United States have jumped to more than 21 million, with the death toll exceeding 356,000 since the virus first emerged in China in late 2019, according to the US Centers for Disease Control and Prevention. The government is scheduled to publish its closely followed employment report for December on Friday. According to a Reuters survey of economists, non-farm payrolls likely increased by 71,000 jobs after rising by 245,000 in November.
Economists expect the unemployment subsidy will push up first-time jobless claims after uncertainty whether it would be renewed contributed to a drop in applications in recent weeks.