Ranks of newly US unemployed rise sharply along with virus cases

USA & World

Ranks of newly US unemployed rise sharply along with virus cases

The number of Americans filing for first-time unemployment benefits with states jumped to 853,000 last week – marking a 137,000 increase from the previous week’s reading, the United States Department of Labor said on Thursday.

The steep rise in weekly jobless claims signals that layoffs are increasing as measures to contain COVID-19 are implemented across the country, sapping business activity and sowing uncertainty into the outlook.

The number of Americans collecting state jobless benefits overall – a metric known as continuing claims which lags initial ones by a week – rose by 230,000 to 5,757,000 – the first increase since August.

The rise in jobless claims comes at a precarious time for the nation’s economic recovery and millions of out-of-work Americans who have been left financially vulnerable after key federal financial lifelines lapsed this summer.

They are now staring down the barrel of more federal enhanced jobless protections expiring at the end of this month, including programmes that extend state unemployment benefits beyond six months for an additional 13 weeks and provide aid to the independent contractors and gig workers.

“When these programs expire, millions of these workers and their families will be financially devastated,” said Heidi Shierholz, senior economist and director of policy at the progressive-leaning Economic Policy Institute in a blog post.

The number of people collecting aid from both state and federal programmes fell to just over 19 million for the week ending November 21.

“The claims figures are overstating the unique number of individuals receiving benefits, but millions are at risk of losing assistance if policymakers fail to deliver another coronavirus relief package that extends these programs,” Nancy Vanden Houten, Lead US Economist at Oxford Economics said in a note to clients.

Democrats and Republicans in Congress remain at loggerheads over a new round of virus relief aid that many economists are urging to keep the recovery on track.

Millions of jobless Americans are facing a bleak labour market. The US economy added only 245,000 jobs in November. And only 12.3 million of the roughly 22 million jobs lost to lockdowns in March and April have been recovered.

The longer people are unemployed, the more lasting the potential scaring to their working lives as their skills erode and their networks dry up.

“It’s important to remember that UI [unemployment insurance] is great stimulus,” said Shierholz. “Reinstating and extending pandemic UI provisions would create or save more than five million jobs.”