Another 742,000 Americans filed for first-time unemployment benefits last week, as the number of claims increased for the first time in five weeks while the US grapples with a record rise in coronavirus cases.
Weekly jobless claims increased by 31,000, alongside a rise of 23,863 in claims for federal pandemic unemployment assistance, the US labour department said on Thursday. Economists had expected claims of 707,000 in the week ending November 14, according to a Thomson Reuters survey.
Overall, 20.3m Americans are still receiving jobless benefits of some kind since the coronavirus crisis began in March in the US, according to data that is reported with a two-week lag.
The US is experiencing a fresh surge in coronavirus infections — 163,075 new cases were reported on Wednesday, bringing the total number of infections past 11.3m.
A number of US cities and states have introduced new restrictions on indoor gatherings and economic activity in response. New York City has closed public schools in an effort to curb the spread ahead of the Thanksgiving holiday, which health officials have warned has the potential to quicken the pandemic’s already rapid spread.
While Covid-19 vaccines being developed by Moderna, as well as Pfizer and BioNTech, are expected to receive approval before the end of the year, economists have cautioned that it will take a while to reverse the blow dealt to the labour market, businesses and investment.
Meanwhile, the stress to the labour market is set to be even more pronounced as the PUA scheme, which expands eligibility, and the Pandemic Emergency Unemployment Compensation (PEUC), which provides an extra 13 weeks of benefits, are set to expire at the end of the year.
Congress has thus far failed to reach a new stimulus deal. Joe Biden, the US president-elect, has also stepped up pressure on the current administration, warning that many more people would die if Donald Trump does not allow for a smooth transition of power. Mr Trump has refused to concede as he proceeds with multiple legal challenges nearly two weeks after the election was called for Mr Biden.
Federal Reserve chair Jay Powell has repeatedly pressed for additional aid to bolster the economy. The US central bank has already pledged to keep rates close to zero and recently vice-chair Richard Clarida signalled possible changes to the Fed’s bond-buying programme as policymakers seek to keep the recovery going.
While the US unemployment rate has halved since its coronavirus crisis peak of 14.9 per cent in April, the pace of job creation has slowed and payrolls remain more than 10m below their pre-pandemic levels.