US unemployment claims jump as virus surge takes toll

More than 19 million Americans are dependent on some type of unemployment benefits

Oliver O'Connell
New York
Thursday 10 December 2020 18:31
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Trump says 'terrific' that nearly 15% of Americans have contracted coronavirus

The number of new claims for unemployment assistance in the US jumped last week to 853,000, as companies cut jobs amid surging cases of the coronavirus.

Data released by the Labor Department shows applications increasing by more than 19 per cent from the previous week’s total of 716,000. The pre-pandemic figure prior to March was approximately 225,000 new applications per week.

The total number of people receiving state-provided unemployment aid rose for the first time in three months to 5.8 million from 5.5 million, suggesting that companies have pulled back on hiring.

More than 19 million people are dependent on some type of unemployment benefits, and unless progress is made in Congress over another relief bill, nearly half will lose that aid in just two weeks.

As new infections, hospitalisations, and deaths from Covid-19 spiral out of control, any sign of a quick economic recovery seems to be derailing with both a weakening job market and consumer confidence.

Retailers hoping for a boost from holiday shopping are so far disappointed with credit and debit card data showing sales down on previous years. An increase in online spending has not offset the steep decline in spending in physical stores.

In November, employers dramatically scaled back hiring, adding just 245,000 jobs. This marked the fifth monthly drop in a row and the fewest new hires since April at the height of the first wave of the pandemic.

While there were sharp jumps in unemployment claims in states that have imposed strict rules on businesses to try and curb the spread of the coronavirus, this was also true in some states that have not.

California, which has imposed tight restrictions on social gatherings and business operations, saw a jump of 47,000 new claims, whereas Texas, which has not imposed new restrictions, saw a weekly jump from 20,000 to 45,000.

While some of the increase might be attributable to there being fewer applications over the Thanksgiving holiday period, the increase is still more than expected.

The latest figures have in excess of 200,000 confirmed new cases of Covid-19 every day.  The initial outbreak in March and April saw a peak of 36,000, and the summer surge topped out at 75,000.

Wednesday saw a new record of 3,055 officially recorded deaths in a single day.

There have now been a total of 15.5 million confirmed cases of Covid-19 and in excess of 290,000 deaths. By the new year, the Centres for Disease Control and Prevention forecasts that the total number of deaths could reach 362,000.

With reporting from the Associated Press

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