WASHINGTON (AP) – The number of Americans seeking unemployment benefits fell slightly last week to 900,000, a historically high level that points to the continuing decline in jobs in a rapid pandemic.
Labor Department report Thursday he stressed that President Joe Biden has inherited an economy that faltered this winter as virus cases increased, cold weather restricted canteens and expired federal bailout aid. The government said 5.1 million Americans continue to receive state unemployment benefits, up from 5.2 million the previous week. This suggests that while some of the unemployed are finding work, it is likely that others are using their state benefits and moving to separate extensive benefit programs.
More than 10 million people receive grants from these expanded programs, which now offer up to 50 weeks of benefits, or from a new program that offers benefits to contractors and the self-employed. All in all, nearly 16 million people were unemployed the week ending Jan. 2, the last period for which data is available.
“Unemployment claims continue to show a labor market unable to progress as long as COVID-19 remains in the driver’s seat,” said Daniel Zhao, senior economist at Glassdoor. “While the vaccine provides a light at the end of the tunnel, we are still far from a complete reopening of the economy that could boost recruitment and curb more layoffs.”
New viral infections have begun to slow after months of incessant increases, although they remain high and average about 200,000 a day. The death toll in the United States from the pandemic that erupted ten months ago has exceeded 400,000.
Economists say a factor that has likely increased unemployment claims in the past two weeks is the government’s financial aid package which was signed into law in late December. Among other things, it provided a federal unemployment benefit of $ 300 a week, in addition to regular state unemployment benefits. The new benefit, which runs through mid-March, may be encouraging more Americans to seek help.
Once vaccines are more widely distributed, economists expect growth to accelerate during the second half of the year, as Americans trigger the accumulated demand for travel, dinners and visits to cinemas and concert halls. . This expenditure, in theory, should boost recruitment and begin to recover the nearly 10 million jobs lost by the pandemic.
But for now, the economy is losing ground. Retail sales have fallen for three months in a row. Restrictions on restaurants, bars, and some stores, along with the reluctance of most Americans to shop, travel, and eat out, have led to sharp spending cuts. Restaurant and bar revenues fell 21% in 2020.
The loss of so many jobs has caused hardship for millions of American households. In December, employers cut 140,000 positions, the first loss since April and the sixth consecutive month in which recruitment has weakened. The unemployment rate remained stagnant at 6.7% still high.
Still, there are indications that the $ 900 billion federal aid package enacted late last month may have begun to cushion the damage, in large part thanks to $ 600 shipments to most adults. The government began distributing payments late last month.
These payments have likely helped increase spending on debit and credit cards issued by Bank of America, the bank’s economists wrote last week. Total card spending jumped 9.7% the week ending Jan. 9 compared to the previous year. This went from a 2% year-over-year increase before stimulus payments, Bank of America said.
Last week, Biden unveiled a $ 1.9 trillion coronavirus plan this would provide, among other things, $ 1,400 for most Americans, which, in addition to the $ 600 already being distributed, would bring the total to $ 2,000 per adult.
The new plan would also provide $ 400 a week in federal benefits for unemployed Americans and extend a moratorium on evictions and foreclosures through September. Biden’s proposal will require congressional approval and some Republicans in Congress have already expressed reservations about its size.