Jobless Claims Are Expected to Stay Elevated After Last Week's Jump
By Sarah Chaney Cambon and Hannah Lang
Layoffs likely remained elevated last week as the labor-market
recovery stalls this winter amid surging coronavirus cases,
tightened business restrictions and a wary public.
Economists expect about 925,000 workers filed for jobless
benefits last week, with the number holding nearly steady after
claims for unemployment benefits jumped at the start of January.
Claims, a proxy for layoffs, remain above the pre-pandemic peak of
695,000 and are higher than in any previous recession for records
tracing back to 1967.
"Covid hasn't let up, and it's still creating massive amounts of
economic havoc," said AnnElizabeth Konkel, an economist at jobs
As Covid-19 infections increased into the winter, states and
localities imposed new capacity restrictions on businesses such as
restaurants. Further, some consumers remain hesitant to eat
indoors, travel or go to a movie theater, reducing demand at places
that remain open.
Delayed filings by workers over the Christmas and New Year
holidays, as well as $300 a week in extra jobless benefits included
in a coronavirus-relief package signed into law last month, also
could have factored into the large claims increase for the week
ended Jan. 9. Still, the four-week moving average for claims, which
smooths out weekly volatility, rose in the week ended Jan. 9.
More broadly, the pandemic's effects are restraining the
economic recovery after steep losses last spring. Employers slashed
140,000 jobs in December, the first monthly decline in payrolls
since the coronavirus shut down businesses this past spring.
Consumers have cut back on purchases this winter after spending
steadily for several months.
Economists expect hiring and spending to regain steam later this
year. For one, warmer weather could bring more people out of their
homes to spend when spring arrives.
A new round of fiscal stimulus -- President Biden is pursuing
$1.9 trillion in additional aid -- and the prospect of widespread
vaccine distribution also led economists to raise their growth
projections in a January Wall Street Journal survey. They projected
U.S. gross domestic product to grow 4.3% in the fourth quarter of
2021 from the same period a year earlier, up from a 3.7% growth
forecast in the previous month's survey.
Many workers continue to rely on unemployment benefits. The
number of people collecting unemployment benefits through regular
state programs rose to nearly 5.3 million for the week ended Jan.
2, from 5.1 million a week earlier, according to the Labor
Department. Still, over the course of the recovery the number of
continuing claims has declined from a peak of nearly 25 million
this past spring, as laid-off workers were recalled to their jobs
or found employment elsewhere.
Sharon Goulden of San Antonio lost her job in the
accounts-payable department of a copy-machine company last March.
She said it was her first experience with unemployment.
"At 52, it was pretty scary," Ms. Goulden said.
She said weekly jobless benefits, including $400 in state-level
benefits, helped her stay afloat financially. She and her husband
also canceled streaming services and some cable-television channels
so they could afford rent and car payments. Her husband, who works
full time, started driving for meal-delivery company DoorDash Inc.
to bring in extra cash.
Ms. Goulden said she submitted her résumé to about 20 to 40 jobs
a week beginning in September, and heard back from a small
percentage of employers.
Late last year, she got a new job in the billing department of a
business-technology company. "I got really lucky," Ms. Goulden
Write to Sarah Chaney Cambon at email@example.com
(END) Dow Jones Newswires
January 21, 2021 05:44 ET (10:44 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.