Unemployment claims jumped sharply last week, reports the U.S. Department of Labor.
In the week ending January 9, the advance figure for seasonally adjusted initial claims was 965,000, an increase of 181,000 from the previous week’s revised level. The previous week’s level was revised down by 3,000 from 787,000 to 784,000. The 4-week moving average was 834,250, an increase of 18,250 from the previous week’s revised average. The previous week’s average was revised down by 2,750 from 818,750 to 816,000.
The advance seasonally adjusted insured unemployment rate was 3.7 percent for the week ending January 2, an increase of 0.2 percentage point from the previous week’s unrevised rate.
The Associated Press reports,
The number of people seeking unemployment aid soared last week to 965,000, the most since late August and a sign that the resurgent virus has likely escalated layoffs.
The increase ties directly to the recent surge in COVID cases and efforts to contain it.
The high pace of layoffs coincides with an economy that has faltered as consumers have avoided traveling, shopping and eating out in the face of soaring viral caseloads. More than 4,300 deaths were reported Tuesday, another record high. Shutdowns of restaurants, bars and other venues where people gather in California, New York and other states have likely forced up layoffs.
The pandemic continues to control the pace of recovery.
Economists say that once coronavirus vaccines are more widely distributed, a broader recovery should take hold in the second half of the year…
Yet many analysts also worry that with millions of Americans still unemployed and as many as one in six small companies going out of business, people who have been hurt most by the downturn won’t likely benefit from a recovery anytime soon.
“While prospects for the economy later in 2021 are upbeat, the labor market recovery has taken a step backward,” said Nancy Vanden Houten, an economist at Oxford Economics, “and we expect claims to remain elevated, with the risk that they rise from last week’s levels.”
As has been the experience for most the past year, the impact is uneven, falling heavily on the hospitality and arts sectors.