The Labor Department reported on Thursday that unemployment insurance claims for the first time jumped to 965,000 last week amid indications of a slowdown in employment due to epidemic restrictions.
The total was worse than Wall Street estimates of 800,000 and above the previous week’s total of 784,000.
Markets did not react much to this number, as the decline in economic activity was expected to be matched by further stimulus from Washington. President-elect Joe Biden announced later on Thursday his hopes for another package potentially exceeding $ 1 trillion.
Futures prices continued to indicate opening partial gains on Wall Street.
However, the number of unemployed for the week ending January 9 was another sign of the economic turmoil caused by restrictions on activity imposed to combat the epidemic. The total was the highest since the week of August 22, when just over a million claims were filed.
Continuing claims were also higher, rising from 199,000 to 5.27 million. That number is a week behind total weekly claims and increased for the first time since late November.
Total government benefit recipients have fallen sharply despite higher weekly numbers. This level decreased to 18.4 million from 19.2 million in the previous week. Data is two weeks behind total weekly claims. The drop came primarily from a decrease in PEPs, although it was still much higher than the 2.18 million benefit recipients the previous year.
The increase in claims has spread across a few states, mostly those with stricter corporate restrictions.
Illinois, where Chicago imposed restrictions on restaurants, saw a jump of 51,280, according to unadjusted data. The other big winners are California, which does not even allow outdoor dining and saw its claims rise by 20,587, an increase of 13%. The New York average increased by 15,559.
However, several states with relatively loose restrictions saw notable gains. Florida more than doubled its claims, to 50,747, while Texas saw an increase of 14,282.
Recently there have been indications that the job gains that began in May are beginning to decline.
In December, non-farm payrolls fell for the first time during the recovery from the market’s lowest Covid levels, dropping 140,000 while the unemployment rate held steady at 6.7%.
The Federal Reserve said Wednesday that business contacts in all 12 central bank districts are reporting a drop in hiring and difficulty getting jobs. Economists generally see the 2021 economy starting slow but gaining momentum as the year progresses and the Covid-19 vaccine spreads.