900K Unemployment Claims Show US Economy Still Reeling From Pandemic
WASHINGTON — The number of unemployment claims filed last week fell to 900,000, a number that remains historically high and suggests the economy still has a long way to go before it fully recovers from the coronavirus pandemic.
The Labor Department also reported that 5.1 million Americans are continuing to receive state jobless benefits, down from 5.2 million in the previous week.
That number suggests that while some of the unemployed are finding jobs, others are likely using up their state benefits and transitioning to separate extended-benefit programs.
Overall the report shows that the economy faltered this winter, stumbling under the weight of an ongoing pandemic, cold weather forcing an end to outdoor dining and the expiration of federal rescue aid.
All told, nearly 16 million people were on unemployment in the week that ended Jan. 2, the latest period for which data is available.
Brian Deese, the new director of the National Economic Council under President Joe Biden, called the report “another stark reminder that we must act now on the President’s American Rescue Plan to get immediate relief to families and spur our economy.
“Nine-hundred thousand more Americans filed claims for unemployment because they are out of work in an economy that is moving in the wrong direction,” he said. “We must act now to get this virus under control, stabilize the economy, and reduce the long-term scarring that will only worsen if bold action isn’t taken.”
More than 10 million people are receiving aid from those extended programs, which now offer up to 50 weeks of benefits, or from a new program that provides benefits to contractors and the self-employed.
Most economists suggested Thursday that another factor that likely increased jobless claims in the past two weeks is a government financial aid package that was signed into law in late December.
Among other things, it provided a $300-a-week federal unemployment benefit on top of regular state jobless aid.
The new benefit, which runs through mid-March, may be encouraging more Americans to apply for aid, the consensus suggests.
Those same economists suggest once coronavirus vaccines become more widely distributed, the growth rate will begin to accelerate, a byproduct of Americans spending on travel, dining out and live entertainment.
If all goes as predicted, nearly all of the 10 million jobs lost to the pandemic should be regained by the end of the year.
Last week, Biden unveiled a $1.9 trillion coronavirus plan that would provide, among other things, $1,400 checks for most Americans, which, on top of the $600 checks already being distributed, would bring the total to $2,000 per adult.
The new plan would also make available $400 a week in federal benefits for jobless Americans and extend a moratorium on evictions and foreclosures through September.
“The president has outlined a set of decisive actions in the American Rescue Plan to … ensure that millions of our families who are struggling to make ends meet, put food on the table, and keep a roof over their head in the midst of this crisis are able to get to the other side with dignity,” Deese said. “It’s critical that Congress act quickly on the president’s proposals and provide relief for families in need.”
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