By Hannah Lang 

The number of workers seeking unemployment benefits likely declined but remained elevated last week, as the labor market struggles through a pandemic-driven winter slowdown, forecasters said.

Economists surveyed by The Wall Street Journal estimated that 875,000 unemployment claims were filed last week, down slightly from about 900,000 a week earlier.

Weekly applications for unemployment claims, a proxy for layoffs, have remained for months well above the pre-pandemic peak of 695,000 and are higher than in any previous recession for records tracing back to 1967.

"The virus is in the driver's seat--there's no getting around it," said Daniel Zhao, senior economist and data scientist at Glassdoor, a company-ratings and job-listings website. "Until we control the pandemic, we can't hope for a full recovery economically."

Weekly jobless claims are volatile but have generally trended higher since November, when they were below 800,000, to 926,000 during the week of Jan. 9. They point to a slowing economic recovery, as surging coronavirus case numbers, fresh safety restrictions and colder weather hamper the labor market's recovery from the initial shock of the pandemic last spring. Employers cut 140,000 jobs nationwide in December, with gains in many industries more than offset by losses at restaurants, bars, hotels and other businesses related to leisure and tourism.

When the coronavirus outbreak triggered widespread shutdowns and business restrictions last spring, Samantha DiStefano, owner of Mama Fox bar and restaurant in Brooklyn, said she laid off her entire staff of about 20 employees. During the summer, when new cases in New York were low and outdoor dining more feasible, she returned to pre-pandemic staffing levels, she said. But the holidays brought colder temperatures and fewer customers. Now, she's back to just a handful of employees.

"Things started getting quiet, and then they fell off a cliff by the Thanksgiving holiday," she said. "Everyone's been getting their hours cut."

Still, the distribution of the Covid-19 vaccine and falling case numbers across the country might mean a light at the end of the tunnel, Mr. Zhao said.

"There is a case for cautious optimism that the economy will start to recover more quickly in the spring, and then could even rebound faster once the vaccine is widely distributed," he said.

At DiStefano's restaurant, sales are just a quarter of what they were last winter, before the pandemic struck, she said. She is hopeful for the spring, when milder weather might lure more diners and she can hire more wait staff. But it will take much longer for New York's hospitality businesses to recover, she said.

"Even if revenue goes back to normal, it's going to be years before we can get the ship straight again," Ms. DiStefano said.

Write to Hannah Lang at Hannah.Lang@wsj.com

 

(END) Dow Jones Newswires

January 28, 2021 05:44 ET (10:44 GMT)

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