Unemployment insurance claims for the first time varied little over the past week, despite other indicators that the labor market weakened in late 2020.
Weekly claims amounted to 787,000 for the week ended Jan. 2, the Labor Department said Thursday. This was lower than the Dow Jones estimate of 815,000 and a slight decrease from the total revised upwards from 790,000 the previous week.
The report also showed a 126,000 drop in ongoing claims, which reduced the total to 5.07 million. Beneficiaries of all programs also fell, falling by 420,000 to 19.2 million.
Claims remain well above pre-pandemic levels, as a continued increase in Covid-19 cases has led to economic constraints in states and municipalities across the country.
On Wednesday, ADP reported that private procurement was contracted for the first time since April, as companies launched 123,000 in December. This balance showed that almost all redundancies occurred in large companies and the hospitality industry, as hotels, restaurants and bars have been especially hard hit by the winter resurgence of the pandemic.
“A combination of coveted fear and mandatory restrictions on activity in the services sector is shrinking businesses and no real relief is likely to occur until a sustained decrease in pressure on hospitals appears; this is probably a story to be reckoned with. end of February, “he wrote. Ian Shepherdson, chief economist at Pantheon Macroeconomics.
The weekly number of claims comes a day ahead of the heavily monitored non-farm payroll report.
The Labor Department is expected to report on Friday that the U.S. economy added just 50,000 jobs as a tumultuous 2020 closed, while the unemployment rate rises to 6.8%, according to Dow Jones estimates.
Even amid the likelihood of hiring slowing with the end of the year, the four-week moving average of claims continued to decline, falling to 818,750 last week. However, the labor market remains in deep distress, as the four-week average a year ago was 219,750.
Statewide, Illinois recorded by far the largest drop in claims at 62,765, according to unadjusted data. Several states showed gains of more than 10,000, including Colorado, Georgia, Kansas, Virginia and Texas.
Even with the decline in hiring, the fourth quarter is expected to show considerable growth.
Monitoring the Atlanta Federal Reserve’s GDPNow activity points to a 8.9% gain in gross domestic product amid rising consumption and investment.